Debates — Child Maintenance and Other Payments Act 2008

Committee stage in the Lords

07 Feb 2008150 speechesView in Hansard ↗

The Deputy Chairman of Committees (Lord Geddes)I will not waste the Committee’s time by talking about Divisions, as they are singularly unlikely to happen on a Thursd…
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The Deputy Chairman of Committees (Lord Geddes)Conservative
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I will not waste the Committee’s time by talking about Divisions, as they are singularly unlikely to happen on a Thursday. Clause 18 [Transfer of cases to new rules]:
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Lord Kirkwood of Kirkhopemoved Amendment No. 102:
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Lord Kirkwood of KirkhopeLiberal Democrat
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moved Amendment No. 102:
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Lord SkelmersdaleI shall speak to Amendments Nos. 103 to 107, to which I put my name. They are in the centre of the two brackets: Amendm…
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Lord SkelmersdaleConservative
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I shall speak to Amendments Nos. 103 to 107, to which I put my name. They are in the centre of the two brackets: Amendments Nos. 102 and 220. As the noble Lord, Lord Kirkwood, said, transference has proved to be a veritable nightmare for the CSA. It would be helpful first to establish from the Minister not how many cases have been transferred but how many have not. I suspect that there are an awful lot. On Amendment 102, as I understand it, under the Bill, some non-resident parents will get an awful shock quite soon, because HMRC data will become available to CMEC and a reassessment will presumably be made. I am talking not so much about single transference as about, in a sense, double transference. The noble Lord, Lord Kirkwood, is interested in transferring the original cases and the 2003 cases to the new CMEC formula under the Bill. Before that, an element of transference will be going on anyway. The Minister might say that it is not true transference, but it is certainly an alteration. I do not think that there is any doubt about that. The whole point of the amendments to which I have put my name is to understand exactly how the new scheme will take over from the old one. The last I heard was in a letter to someone, possibly even to me, from the Minister. It gave the impression that he did not have the slightest idea. He said that it would be a matter for CMEC when it got around to it. That, at least, was honest, and I am sure that he can confirm it today—although perhaps he would not like to use exactly the same words as I just did. With two different child maintenance payment schemes running concurrently at present, how can he assure the Committee that a third will not again cause hideous confusion for CMEC or, even worse, for the parents due for maintenance payments, whether those payments are in to the parent with care or out from the non-resident parent? That is extremely important. My real worry, though, lies not with the ensuing confusion so much as with the effects of that confusion. There is a possibility—not to put it any more strongly—that the non-resident’s liability for payment could be lost in the transition between the former scheme and the current scheme. Does the Minister see that in the same light as I do? Does he see it as a problem? Does CMEC plan to put in place any mechanisms that will prevent that happening? Can it, or he, guarantee some sort of transitional protection to parents as the commission implements yet another scheme? At present, regulations under Schedule 5 will be subject to negative resolution, as the noble Lord, Lord Kirkwood, said. That is on the basis that the process by which cases transfer will take around three years and that issues may emerge requiring changes to be made quickly. I agree, given the importance of transitional arrangements, that it is right that the regulations governing the process should receive the positive approval of Parliament before enactment. There should not be much difference in speed between affirmative resolution and negative resolution, except that regulations made under negative resolutions come into effect on the day that they are laid. I cannot imagine that the speed requirement will be such that four to six weeks would not be appropriate before the regulations came into effect. I agree with the noble Lord, Lord Kirkwood, that this is such an important subject and will affect so many people that it is right that Parliament should discuss the regulations before they become operative. With regard to the prioritisation in Amendment No. 104, clearly the principles are not in any particular order. None the less, CMEC will have to have some idea of the order in which it will transfer the various cases. Does the Minister have any thoughts on that, or will he say yet again that it will be a matter for the commission? The interesting thing about Amendment No. 220 is that it is not necessary if the noble Lord and I get what he has suggested; namely, the affirmative procedure. I turn to Amendment No. 106. Paragraph 6(2)(c) of Schedule 5 will, “prescribe circumstances in which liability under such a maintenance calculation is to be subject to a prescribed adjustment”. With all my reading, I have failed to understand quite what may be in the Minister’s mind. It would be extremely helpful to know. I shall have to await the Minister’s response to Amendment No. 105. I am sure that I shall be able to comment far better on it then.
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Baroness Hollis of HeighamPerhaps I may put two brief questions to the Minister. The first relates to transition. Will he help me to understand S…
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Baroness Hollis of HeighamLabour
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Perhaps I may put two brief questions to the Minister. The first relates to transition. Will he help me to understand Schedule 5 more clearly? As I take it, there is a case load in the two statutory systems. Should an NRP have a new relationship under the new, third system, that will potentially require a recalculation for the parent with care in one of the existing statutory schemes. At that point, that case will be pulled over to the new system. Can I take it from my noble friend that it will not be assumed that that existing statutory case, irrespective of activity in it, will go automatically into the voluntary system? I would be horrified if that were to happen. If somebody is in the statutory system and is taken by default into the new system because a new case under the new system affects them and their income has to be recalculated—for example, the person concerned may go from supporting one family to supporting two—there must be a presumption in favour of the statutory system unless the person chooses to go into the voluntary system. With a new case, one could argue that it is different: the person concerned is going into it with their eyes open. But it seems unwise to tell somebody who is in the statutory system that they are to go into the voluntary system unless they choose to opt in to the statutory system. Will the Minister clarify that? My apprehensions may be groundless. My second question arises from some of the statistics in the briefing, which made me raise an eyebrow. Has the Minister reflected on the implication of the fact that twice as many non-resident parents as parents with care want the voluntary system? Can he think why? I can suggest several reasons: they think that they will get a better deal; they think that they will pay less money; they think that there will be less pressure on them to pay; and they think that they will be able to hug knowledge and information that she—the parent with care—will not have and which will allow them, to a degree, to control what they pay. The question obviously belongs to other debates as well, but if there is any statistic that should alarm the Minister about the potential for the voluntary system to be grabbed by NRPs, if they can, it is the one that I have just given. It can mean only that NRPs will seek to get a better deal for themselves. The perception is not necessarily shared by the parent with care. This frightens me.
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Lord SkelmersdaleThe noble Baroness has been assiduous in her attendance in Committee, but I think that she had a small gap towards the…
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Lord SkelmersdaleConservative
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The noble Baroness has been assiduous in her attendance in Committee, but I think that she had a small gap towards the end of Tuesday, when I suggested that, in a voluntary arrangement, £40 would be the limit, which is what she has just talked about.
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Baroness Hollis of HeighamIt depends on whether the limit of £40 applies only to those who remain within the CMEC system or to those who are maki…
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Baroness Hollis of HeighamLabour
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It depends on whether the limit of £40 applies only to those who remain within the CMEC system or to those who are making voluntary arrangements. How will one know and track that? The noble Lord is probably right. The person concerned will say, “I am not going to pay any more than £40 because that’s all you’d get under the statutory system at any rate”. I would say that if I were in their position. I might be required to pay £60, but if I knew that, under the statutory system, the other party would receive only £40 and the other £20 would go to the taxman, I would say to them, “Well, I am only going to give you £40. Under the voluntary system, you’d be no better off”. That is another way of keeping the pressure on and reducing the contributions that they may pay.
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton)This has been an interesting start to our proceedings today. I shall deal first with the two questions raised by my nob…
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton)Labour
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This has been an interesting start to our proceedings today. I shall deal first with the two questions raised by my noble friend. The first was the proposition that there is an existing case under either the first or the existing scheme and that, under the new arrangements, there will be another relationship and a link with that earlier case. The specific question was whether that would automatically force that first case into the voluntary system—
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Baroness Hollis of HeighamUnless there is an opt-in.
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Baroness Hollis of HeighamLabour
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Unless there is an opt-in.
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Lord McKenzie of LutonYes. The question was whether that would automatically force the first case into the voluntary system irrespective of w…
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Lord McKenzie of LutonLabour
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Yes. The question was whether that would automatically force the first case into the voluntary system irrespective of whether the second parent with care was in the statutory system. The answer to that is clearly no. There would not be an automatic deeming that the first case was in the voluntary system. Quite how the mechanics will work during the transitional period will need to be sorted through, but the general principle—this touches on a point raised by my noble friend at Second Reading—is that in linked cases, if I may use that term, one arrangement may well be voluntary by choice and another may be in the statutory system. I could take my noble friend through how the arithmetic works, but perhaps we could do that outside the Committee.
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Baroness Hollis of HeighamMy noble friend has been very helpful. Perhaps he could enlighten us a little more. We have family A in the statutory s…
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Baroness Hollis of HeighamLabour
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My noble friend has been very helpful. Perhaps he could enlighten us a little more. We have family A in the statutory system. A new family, family B, comes into the system. Family B, the second family, chooses to go for the statutory system. What is then the presumption about family A? Is it that the family will be pulled over into the statutory system but can opt out into the voluntary system if they wish, or will the presumption be that they will go into the voluntary system unless they opt out and go into the statutory system? Secondly, if family B has opted for the voluntary system, what then happens to family A? In other words, where is the presumption?
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Lord McKenzie of LutonThe presumption is that each of the parents involved has a choice. In the first case, if there is a non-resident parent…
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Lord McKenzie of LutonLabour
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The presumption is that each of the parents involved has a choice. In the first case, if there is a non-resident parent and a parent with care, if neither wants to stay in the statutory system, that arrangement does not have to stay in the statutory system. Similarly for the second case—I am not sure whether we are talking about a common NRP or a common PWC—where there is a common NRP. If, for that arrangement, both want to be out of the system, both would be in the voluntary system; if one of them chooses to be in the statutory system, they will be in the statutory system. There is nothing to preclude a common NRP having a voluntary arrangement in respect of one relationship and a statutory arrangement in respect of a second relationship. I know that that raises questions about how the arithmetic works. I can summarise it on the assumption that they are both in the statutory system, although the first case in the voluntary system would not be adjusted for a change in the arithmetic. If that became unaffordable, presumably a parent would choose to opt in to the statutory system.
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Lord SkelmersdaleSurely in the case postulated by the noble Baroness, Lady Hollis, there are two parts. First, there are more children—t…
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Lord SkelmersdaleConservative
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Surely in the case postulated by the noble Baroness, Lady Hollis, there are two parts. First, there are more children—there is another relationship, but with a common non-resident parent. As I understand it, that automatically affects the calculation. The subsidiary question that I think the noble Baroness was asking was: in that case, assuming that they do not opt out of the system at that point, which formula will be used? Will it be the new CMEC formula or the 2003 formula? I suspect that, for the first three years, it will be the 2003 formula, not the CMEC formula, because the CMEC formula will not really be up and running, except for new cases, and that could not be described as a new case.
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Baroness Hollis of HeighamI think that the noble Lord is right. If I have understood my noble friend correctly, in a new case involving a second…
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Baroness Hollis of HeighamLabour
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I think that the noble Lord is right. If I have understood my noble friend correctly, in a new case involving a second family in the voluntary system with a NRP shared with a family in the statutory system, the statutory figure would remain unaffected. All that they could get is the head space of the difference between, say, two and three children, which might be 5 per cent net, 4 per cent gross, as opposed to divvying up the full sum between them. That would be grossly unfair to the second family. That suggests that for any new family coming into the new scheme, if there is any linked case, the only way that they can get a fair apportionment of resources, especially if the first family chooses to stay in the statutory system, would be for them also to go into the statutory system. Otherwise, they could get only the head growth for the extra child, not share the apportionment between the two families.
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Lord McKenzie of LutonLet me have another go at this. Let us start with a situation where the non-resident parent has two relationships, the…
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Lord McKenzie of LutonLabour
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Let me have another go at this. Let us start with a situation where the non-resident parent has two relationships, the first one of which is currently in one of the statutory systems, either CS1 or CS2, and there is another parent with care involved. I agree entirely with the noble Lord, Lord Skelmersdale, that if two children have to be dealt with under the formula where there was only one before, that will affect the percentage that applies to the non-resident parent and the sum must be divided among the children involved. However, that affects only the amount that is then due to the parent with care who is in the system; it does not of itself drive an adjustment to a voluntary arrangement. If it were the other way around, so that there was a voluntary arrangement to start with and a new arrangement with the same non-resident parent, and the second relationship resulted in a request to be in the statutory system, the calculation on the percentages to be applied to the non-resident parent’s income would be driven on the basis of two children. Whatever sum is produced will be divided by two for each of the two children. The parent with care who is in the system would get that amount, but it could not force any adjustment to the pre-existing voluntary arrangement, regardless of whether that arrangement involved a higher or a lower sum. It may be that that would cause the parties to seek a renegotiation of the voluntary arrangement. If the renegotiation is not successful, there is an option for the non-resident parent to bring the case within the statutory system so that the formula would apply to both situations. This would not of itself disturb a voluntary arrangement. Although clearly the number of children being supported in the system would affect the calculation, it would not be applied to the voluntary system.
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Baroness Hollis of HeighamI am sorry to take up the time of the Committee. Let us say that the non-resident parent is supporting two children at…
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Baroness Hollis of HeighamLabour
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I am sorry to take up the time of the Committee. Let us say that the non-resident parent is supporting two children at a net level of 20 per cent of his income under one of the statutory schemes. He goes into a new relationship that produces one child. That would mean that his total contribution under the net formula would be 25 per cent. If the second family goes into the voluntary system, would that family get merely 5 per cent, the difference between the 20 per cent already going to the statutory family and the total net percentage required to support three children, which is 25 per cent? Would the statutory family remain unaffected at 20 per cent because the second family was in the voluntary system or, despite that, would there be a presumption that the 25 per cent total would be divided up pro rata, in which case the second family would get a little over 8 per cent? Which of those two would apply in the voluntary system, and what would be the case in the statutory system?
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Lord McKenzie of LutonThe 25 per cent calculation would not affect the situation at all ab initio if a voluntary arrangement had been entered…
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Lord McKenzie of LutonLabour
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The 25 per cent calculation would not affect the situation at all ab initio if a voluntary arrangement had been entered into. The two parents have agreed an arrangement—
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Baroness Hollis of HeighamI am sorry. The non-resident parent is paying 20 per cent for two children in the statutory system and now there is a n…
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Baroness Hollis of HeighamLabour
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I am sorry. The non-resident parent is paying 20 per cent for two children in the statutory system and now there is a new family. Normally he would be required to pay 25 per cent in total, so the difference between the old and the new assessment would be 5 per cent. Would only the extra 5 per cent go to the second family, or would the entire 25 per cent be reapportioned?
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Lord McKenzie of LutonLet me try again. The 25 per cent net figure would apply to the new calculation. That amount, whatever it is, would be…
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Lord McKenzie of LutonLabour
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Let me try again. The 25 per cent net figure would apply to the new calculation. That amount, whatever it is, would be divided between the three children. There would be an adjustment to the statutory arrangement for the first two children so that the parent with care would get two-thirds of 25 per cent. In relation to the one-third, there would be no effect on the voluntary arrangement. Whatever the voluntary agreement was would drive what the payment is. If that became unaffordable in the light of the adjustment, it would be open to either parent to bring it into the statutory system. In that case, the 25 per cent level would apply and would be divided into three with two-thirds going to the parent with care and one-third to the other parent. I hope that that has dealt with the point. All sorts of combinations can affect this. It is more likely that it will hit cases the other way around, where there is a voluntary arrangement to start with and then someone comes into the statutory scheme. The same principle applies. You take account of all the children who are involved in maintenance. That drives the formula and the percentage. It is divided up among those children and is adjusted only for those in the statutory scheme. My noble friend also asked whether, if there were an arrangement under the new basis of assessment in 2010, that would drag an existing arrangement under the previous scheme across to the new formula. I believe that the answer is yes. Obviously when we get to 2013 there will be only one formula. I see reassuring nods from the back.
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Lord SkelmersdaleI am pleased to hear it. I must say that I am surprised, because that does not come through in my reading of the variou…
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Lord SkelmersdaleConservative
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I am pleased to hear it. I must say that I am surprised, because that does not come through in my reading of the various papers.
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Lord McKenzie of LutonIt may not have come through because some of the intricacies of how this will work in practice are still being worked t…
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Lord McKenzie of LutonLabour
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It may not have come through because some of the intricacies of how this will work in practice are still being worked through. I was enunciating the principles. In a sense that second point is no different from what happens at the moment. If someone starts off in the old scheme and a new scheme case is linked to it, that drags the case across on to a new basis of assessment. There will be differences and fewer complications under the new arrangements. Some of the complexities around linked cases will fall away because under the new system the CSA—or CMEC—will not police the benefits system as it does at the moment. That will be the job of Jobcentre Plus. Therefore, ordering cases around the NRP will make some of the processes easier. That is the principle involved. I hope that that has clarified matters. I will be more than happy to have another go or to write to Members of the Committee if they feel that that would be helpful. We are not intending to change voluntary arrangements although the children involved in that would clearly impact on the percentage that is used.
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Lord SkelmersdaleI do not know about the noble Baroness, but I believe that I have the point. However, if, having read Hansard, I find t…
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Lord SkelmersdaleConservative
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I do not know about the noble Baroness, but I believe that I have the point. However, if, having read Hansard, I find that I have not understood the point and I make an oral request for a letter from the Minister, would he be good enough to provide one?
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Lord McKenzie of LutonIndeed. If any noble Lord who has participated in this debate feels that, on reflection, it would be helpful to have so…
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Lord McKenzie of LutonLabour
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Indeed. If any noble Lord who has participated in this debate feels that, on reflection, it would be helpful to have something more detailed in writing, I would be happy to arrange that.
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Baroness Hollis of HeighamPerhaps my noble friend will give me an assurance about a parent who currently is in the statutory system. If a second…
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Baroness Hollis of HeighamLabour
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Perhaps my noble friend will give me an assurance about a parent who currently is in the statutory system. If a second family comes into the new system and, therefore, the first family has to be drawn into the new system, can he assure me that there will not be a presumption that that second family will go into the voluntary system?
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Lord McKenzie of LutonAbsolutely. I can give a very clear assurance on that. People have a choice about whether they are in the statutory sys…
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Lord McKenzie of LutonLabour
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Absolutely. I can give a very clear assurance on that. People have a choice about whether they are in the statutory system or have a voluntary arrangement. The choice is for either parent. There does not need to be agreement to be in the statutory system; just one parent can cause that to happen.
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Baroness Hollis of HeighamIt does not have to be an opt-in, then. There is a presumption in favour of staying in the statutory system, unless the…
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Baroness Hollis of HeighamLabour
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It does not have to be an opt-in, then. There is a presumption in favour of staying in the statutory system, unless the existing parent with care chooses to opt out into the voluntary system. Is that right?
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Lord McKenzie of LutonMy noble friend asks whether one technically has to make a claim to be in the new system, which I think is broadly the…
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Lord McKenzie of LutonLabour
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My noble friend asks whether one technically has to make a claim to be in the new system, which I think is broadly the proposition going forward. I would like to reflect on that. In either event, the information and support service will be there to help people to arrive where they want.
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Lord AddingtonI have listened to most of the debate. Even with the amount of expertise in this Room, there is some confusion. Does th…
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Lord AddingtonLiberal Democrat
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I have listened to most of the debate. Even with the amount of expertise in this Room, there is some confusion. Does the Minister agree that the case for affirmative resolution has been made very strongly? The longer the proposals are out in the open, the better chance people stand of getting near them. Perhaps he would take that away for consideration.
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Lord McKenzie of LutonI shall reflect on that. However, if affirmative regulations give us an opportunity for further wide-ranging debate on…
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Lord McKenzie of LutonLabour
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I shall reflect on that. However, if affirmative regulations give us an opportunity for further wide-ranging debate on the subject—
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Baroness Hollis of HeighamWhat a good idea.
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Baroness Hollis of HeighamLabour
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What a good idea.
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Lord McKenzie of LutonI turn to the amendments and I shall pick up some of the broader points that were raised. I welcome the interest in the…
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Lord McKenzie of LutonLabour
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I turn to the amendments and I shall pick up some of the broader points that were raised. I welcome the interest in the transfer of cases to the new arrangements because that is very important, as indicated by all Members of the Committee who have participated. Planning for this transfer is one of the commission’s most significant early challenges. The scheme would have to be approved by the Secretary of State. Within Schedule 5 we have made provision for regulations to require the commission to develop a scheme for the movement of existing customers to the new statutory maintenance arrangements. The process by which cases transfer will commence in 2010 and take around three years. The provision is for negative regulations, but I hear the strength of the argument and will take this away. I believe that the Delegated Powers and Regulatory Reform Committee did not have any problem with what is proposed. It is usually focused on challenging when it believes that the affirmative procedure should be used. I might return to this, even if we change the procedure for the first set of regulations. I understand the point. Our intention is to be completely transparent about how this transfer process will work. The commission’s plan will be published and will be available to Members of both Houses, key stakeholders and, most important, parents, so that they can raise any concerns at that time and before the transfer to new arrangements begins. It is essential not only that Parliament can scrutinise the plan, but also that parents understand the choices that will be available to them during this transfer period. A communication programme to support parents through this process of transition will start in 2009, enabling the first case transfers in 2010. The commission will consult stakeholders on our plans for transition. Amendments Nos. 102 and 105 seem to have similar intentions, which is to keep existing maintenance liabilities running during the transfer process. The amendments differ in their effects, but I understand that they are probing by nature. By freezing ongoing case activity, we run the risk of not addressing any urgent changes of circumstances that may be required. For example, if someone paying an assessed amount of maintenance lost their job, all action on reassessing their case in line with their new circumstances would stop. I do not believe that this is a fair situation to present to anyone, nor do I believe that it is the intention of the amendment. Unfortunately, some incomes do not keep pace with prices; therefore, to base an assessment on what someone earns as opposed to what prices are is a much fairer way of doing things. Additionally, we know that there are many cases that have a current liability of nil. For these cases a percentage increase would have no effect and the nil assessment would remain in place for the length of the transition process. I am sure that this is not the noble Lord’s intention either. During the transfer period, any current assessment will remain in place and will not cease until a new assessment has been carried out under the HMRC assessment formula. This would remove the ability of parents to choose what is best for them, whether this is in or out of the statutory system. I am sure that that is not the intention of Members of the Committee but that would be the consequence. I confirm that the liability will not end before the new scheme liability begins where parents choose to stay in the statutory scheme. We know that a large number of voluntary arrangements are compliant and successful and have a real benefit for the child or children concerned. Therefore, to remove this facility could have a detrimental effect. This is also true of the cash transfer option, which enables those parents who are satisfied with the current arrangements to continue to have support. Amendment No. 104 stipulates that certain cases should be given priority in the move to the new HMRC data-based assessment during the transition period. In the White Paper, which has been referred to, we laid out guiding principles for the approach to transition. These are to focus on supporting the poorest families first; meet parents’ needs by empowering them to make informed choices; minimise disruption and provide a seamless service for the move to the new regime; and ensure that the approach is practical and achievable, learning from the past. As the Committee will be aware, we have consistently stated that it is right that the commission should consider the order in which cases are moved. This gives the commission time not only to plan but also to take account of the scale of the task and the nature of the cases involved. Only the commission will be in a position to know about its levels of other work and available staff resources. It would therefore be inappropriate for us, at this stage, to dictate to the commission how to carry out this major administrative challenge. We know from previous attempts at reform of the child maintenance service that a large scale movement of cases is a complex and time-consuming process. I am sure that the Committee will agree that it would be prudent to let the commission, having learnt the lessons from the past, assess for itself the right order for the movement of its customers, the right plan of action and the right point at which to begin the transition. It would not, therefore, be appropriate to dictate any priorities on the face of the Bill. Amendment No. 106 would remove the facility to allow for a set of prescribed adjustments to be applied to the new formula assessment in certain cases, where the new calculation based on HMRC data differs significantly from the existing liability. This could have the effect of either a marked increase or a marked decrease in maintenance paid or received for either parent. By removing that facility, we run the risk that either parent may not have sufficient time to adjust to a change in their maintenance payments. That could create significant hardship and is not consistent with our intention to minimise disruption during that period. I think that the noble Lord, Lord Skelmersdale, raised the point that some adjustments could be quite significant, as some of the assessments are based on data that are quite old. That is right, so it is important to have a mechanism to potentially smooth the impact of that. Similar arrangements were introduced when the current system was changed from the first one, although they turned out to be quite complex and difficult to manage. A good deal of thought needs to be addressed to this. Without such a mechanism, some parents with care and non-resident parents could hit difficulties. I recognise that the prescribed adjustments regime currently administered is a complex and lengthy process that is difficult for staff and parents to understand. That is why the commission will need time to develop detailed plans to introduce a new and simple way of handling such instances. However, to have no facility and no flexibility would be in no one’s interests. It is for similar reasons that I cannot agree with Amendment No. 107, which would make all regulations made under Schedule 5 subject to the affirmative procedure. Once the transfer process is under way, the commission will be able to see how it is taking shape and may need to make changes at fairly short notice. As any changes will require regulations, making them subject to debates in both Houses could introduce unacceptable delays, which could have detrimental effects for the parents involved. Notwithstanding that, we ought to think seriously about changing the initial set of regulations, but I will revert to that matter on Report. Finally, Amendment No. 220 would require the Secretary of State to set out in regulations the strategy for informing parents of the details of the timetable and arrangements for transfer to the new arrangements. It is our intention to be completely transparent about how the transfer process will work. We will make that information available to honourable Members so that they can raise any concerns at that time and before the transfer to new arrangements begins. Honourable Members and noble Lords, I should say—I saw the Chairman bristling at that. You can see where this speaking note originated. It is essential not only that Parliament can scrutinise the plan but also that parents understand the choices that will be available to them during the transfer period. We are committed to minimising the disruption to parents in that period by providing a seamless service for the move to the new arrangements. We are also concerned that this amendment, were it to be accepted, could build delays into beginning the process of moving cases to the new maintenance arrangements. That could prevent children from benefiting from the movement to new maintenance arrangements at the earliest opportunity. I shall try to pick up some of the other points that have been raised. The noble Lord, Lord Kirkwood, asked about the computer system for the old scheme cases. He said that he thought that the contract ran out in 2010. He is pretty well informed, as usual, but there is a right to extend that as required, which it almost certainly will be. Cases will remain on that system until, possibly, 2013. The noble Lord also asked about the releases under PR1 and how that will affect things. It is vital, and the CSA recognises this, that any new releases should be fully tested. To date they have been extensively tested and we believe that PR1 will be delivered in time to ensure that the indicative timescales in Section 6 that I referred to last time can be adhered to. I stress that it is not just CSA systems that need to be adjusted; Jobcentre Plus is being worked on as well because of the changes around benefits and the removal of Section 6 compulsion. Those systems have to cope as well. I shall take a little step back. It is implicit in the discussion that we have already had that the transitional process proceeds as follows. The first issue is the removal of Section 6. By the end of 2008, on the basis of current plans and timing, there will be a choice for all parents to stay in the system or enter the system. In 2010 the transition of cases from the first and second schemes to the new scheme, for those who wish to stay in the statutory scheme, will then begin. It means that, for a period, three different schemes will run, but we will end up in 2013 with one scheme, in which everybody will be on the same basis of assessment. The transition is not brief, but it is right to build in time to make sure that it can be done effectively and that we avoid some of the difficulties that have been encountered in the past. It is currently proposed that people will have formally to opt in to the statutory system. That is being looked at by the commission but, if that is where we end up, it is important that parents who wish to stay in the system are supported in doing so.
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Lord SkelmersdaleWhile the Minister has been speaking, I have been looking at paragraph 6(1) of Schedule 5, which states: “The Secretary…
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Lord SkelmersdaleConservative
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While the Minister has been speaking, I have been looking at paragraph 6(1) of Schedule 5, which states: “The Secretary of State may by regulation make such provision as appears to the Secretary of State to be necessary or expedient for the purposes of, or in connection with, giving effect”— these are the important words— “to a decision not to leave the statutory scheme”. Could that not be read as a presumption in favour of the voluntary scheme?
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Baroness Hollis of HeighamIt could.
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Baroness Hollis of HeighamLabour
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It could.
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Lord SkelmersdaleIs that desirable? Is it what the Minister wants? I do not know what the noble Lord, Lord Kirkwood, wants, but if my su…
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Lord SkelmersdaleConservative
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Is that desirable? Is it what the Minister wants? I do not know what the noble Lord, Lord Kirkwood, wants, but if my suspicion is correct, we will have an even longer discussion on Report.
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Lord McKenzie of LutonThat takes us back to a debate that we had a couple of days ago. Let us be clear that we want parents to have the choic…
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Lord McKenzie of LutonLabour
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That takes us back to a debate that we had a couple of days ago. Let us be clear that we want parents to have the choice. We want those who are currently in the system to have the choice whether to stay in it just as anybody else will have the choice. We had a philosophical debate about whether we were encouraging voluntary arrangements as a broad principle. I think that it is clear that that is where we are, but it is not inconsistent with making sure that those people who want and choose to go into the statutory system are fully supported in doing so. The mechanics by which they end up in the system are a secondary issue; the principle is that, on the basis of information and support, that is what people choose to do. We must do everything that we can to make sure that that is where they end up.
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Baroness Hollis of HeighamThe noble Lord, Lord Skelmersdale, is absolutely right. The Minister is obviously right in saying that we will move to…
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Baroness Hollis of HeighamLabour
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The noble Lord, Lord Skelmersdale, is absolutely right. The Minister is obviously right in saying that we will move to one statutory scheme, but we are creating one statutory scheme plus a voluntary scheme. Those in the voluntary scheme will have come out of two, possibly three, statutory schemes. We will substitute different complexities for those that we have now. Although the Minister has been helpful, I am still not persuaded of the appropriateness of the interface. Perhaps I may have one last go before I shut up on this and we perhaps revisit the issue in some other way. Let us assume that somebody is in the statutory scheme and remains in it. They have two children and receive 20 per cent of income net. Under a new case in the voluntary scheme, as the Minister said, they would be entitled to approximately 8 per cent or one-third of the other’s total liability of 25 per cent. Under that new, voluntary case, they would have to know not only the other’s income but also all the details of the existing case on the statutory system to be aware that they were entitled not to 15 per cent net, which they might recently have thought if they were the only case, but to 8 per cent net because an existing case was on the statutory system, which they, being voluntary, had no way of knowing about or accessing. The second family, in the voluntary scheme, may well get short-changed because of a lack of knowledge and bargaining power in the equation. Let us take a second case as an example. It is a brand-new case coming into the voluntary system. One child is involved and the non-resident parent agrees the equivalent of 15 per cent. That is fine and everybody is very happy. There then comes a second child in the voluntary system. The first person asks, “What is going to happen?”. Are the two women expected to get together over a cup of tea and divvy up the money? How will each of them know what they can reasonably ask from the non-resident parent without them knowing about the other and what the other is getting? There are real problems with the alignment of a voluntary system with a statutory one and with the alignment of one voluntary system with another. I absolutely agree that in many cases there is no problem with there being a single, one-off voluntary system where there is an agreement to pay. However, the moment you move beyond that—we saw this with all the problems with the old CSA—we are simply substituting different sorts of complexity, without the parent with care necessarily being able to have formal knowledge based on what the statutory bodies have collected from her.
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Lord McKenzie of LutonIt is inevitable that the more links there are, the more complexity there is. However, to return to the first of my nob…
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Lord McKenzie of LutonLabour
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It is inevitable that the more links there are, the more complexity there is. However, to return to the first of my noble friend’s examples of what a parent with care in the voluntary scheme will be entitled to, the starting point is that they would have a voluntary arrangement for something to which the two parties agree. If that negotiation could be successfully concluded and sustained, it would involve some discussion about the non-resident parent’s other commitments. At the end of the day, if the new parent with care is not satisfied with where a voluntary agreement is heading, they would test the statutory scheme and see what came from it. We acknowledge that there are challenges for parents with care to obtain information, particularly when relationships have been fairly transitory. That is why we have to do all that we can to enhance the variation arrangements and the commission’s engagement with those. I hang on to the point that people are encouraged to enter voluntary arrangements with which they are satisfied. They then negotiate between themselves, with the help of the information and support service. Where the NRP already has commitments, whether under the voluntary system or the statutory system, I imagine that they will inevitably mention them as part of the discussion and potentially dampen the outcome. However, if the parent with care is not satisfied at any point, the recourse to the statutory system will settle in. That is the protection in the scheme. Let me see whether I can address the other points. Perhaps I concluded on what the broad transition was and how we reach 2013. My noble friend also talked about the disparity between the views of NRPs and PWCs. That is a real point. It is not fair to say that the NRPs will inevitably prefer a voluntary arrangement to the statutory system because they will get away with less. Many of them are bugged by having to be in the system at the moment, particularly when it has not really produced more cash for their kids. That drives some, but I accept not all, of the behaviour. I hope that I have dealt with the queries about the IT systems. I stress that it is for CMEC to decide ultimately which system it ends up with. Inevitably it will start off with the system that is there at the moment and will live with that and with the enhancements that will be made through PR1 through much if not all the transition. As I said, however, that is something for CMEC to decide in the future. The noble Lord, Lord Skelmersdale, asked how many schemes had been transferred.
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Lord SkelmersdaleNo, I did not ask that; I asked how many had not been transferred. I think that it was the noble Lord, Lord Kirkwood, w…
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Lord SkelmersdaleConservative
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No, I did not ask that; I asked how many had not been transferred. I think that it was the noble Lord, Lord Kirkwood, who asked how many had been transferred, which really does not matter.
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Lord McKenzie of LutonWho could say that the noble Lord’s 20-minute introduction does not matter?
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Lord McKenzie of LutonLabour
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Who could say that the noble Lord’s 20-minute introduction does not matter?
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Lord SkelmersdaleI did not say that; I said that that particular question, which was wrapped up in a whole series of other comments and…
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Lord SkelmersdaleConservative
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I did not say that; I said that that particular question, which was wrapped up in a whole series of other comments and questions, does not matter to the argument that I have been trying to pursue.
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Lord McKenzie of LutonIf the noble Lord’s question was how many cases have not been transferred from the first scheme to the—we call it the “…
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Lord McKenzie of LutonLabour
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If the noble Lord’s question was how many cases have not been transferred from the first scheme to the—we call it the “new scheme”, but we will have to get away from that term now that there is a third scheme—current scheme, the answer is very few. I do not have the absolute number, because we said that we would transfer cases only when the new IT systems could cope with that. We know that they have not been able to. Inevitably, cases are drawn across into the current scheme when they are linked under the sort of arrangements that we have been talking about. I have an absolute figure. There are currently 443,680 cases maintained on CSCS—the original scheme. Subject to what happens with linkages in the interim, those cases will remain on that scheme until they come across into the new scheme.
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Lord SkelmersdaleThey will jump the intervening scheme, in other words.
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Lord SkelmersdaleConservative
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They will jump the intervening scheme, in other words.
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Lord McKenzie of LutonIndeed they will. I hope that that has dealt with each of the points raised. The noble Lord, Lord Kirkwood, talked abou…
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Lord McKenzie of LutonLabour
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Indeed they will. I hope that that has dealt with each of the points raised. The noble Lord, Lord Kirkwood, talked about the numbers and how we could be confident on the behavioural responses to the new arrangements. Indeed, we cannot be absolutely confident about that. The surveys that we have undertaken, to which the noble Lord referred, have given us some information and some basis on which to plan. These things are kept under review, but we must ensure that there is capacity and flexibility in the system to deal with what comes from these arrangements. That is why the transition is relatively extended. I will leave it there, if I may. I hope that, on that basis, the noble Lord will feel able to withdraw his amendment. If not, I am going home.
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Lord Kirkwood of KirkhopeWe might as well all go home. The debate has demonstrated that it is obviously essential that this new commission, CMEC…
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Lord Kirkwood of KirkhopeLiberal Democrat
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We might as well all go home. The debate has demonstrated that it is obviously essential that this new commission, CMEC, should make some of its own decisions for itself. However, I make the final point that, as demonstrated by the debate, leaving the commission in charge of the transition by itself is not safe. It is perfectly reasonable to get it to oversee and deploy the plan in the legislation, but we have had much bad experience of this transitional process. This is my final plea. I am encouraged by the Minister saying that he would think about the affirmative resolution procedure being used at parliamentary level, at least in the initial stages of this transfer. If we do not get this right, the organisation has no chance of success. It is carrying a package of legacy issues, which we all understand. However, the debate has been useful, even if it just demonstrates the complexity of the transfer process that we are facing. On that basis, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 18 agreed to.
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Lord Skelmersdalemoved Amendment No. 103:
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Lord SkelmersdaleConservative
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moved Amendment No. 103:
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The Deputy Chairman of CommitteesI have to advise the Committee to delete the word “paragraphs” and insert “sections” in the second line of subsection (…
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The Deputy Chairman of CommitteesConservative
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I have to advise the Committee to delete the word “paragraphs” and insert “sections” in the second line of subsection (2) of Amendment No. 103, as was said.
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Lord Kirkwood of KirkhopeI have three or four amendments in my name and that of my noble friend dealing with Clauses 26 to 28 stand part and Ame…
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Lord Kirkwood of KirkhopeLiberal Democrat
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I have three or four amendments in my name and that of my noble friend dealing with Clauses 26 to 28 stand part and Amendment No. 187. I can dispose of Amendment No. 187 expeditiously. The Committee may know this, but it may be worth asking a couple of questions about the difficulty of enforcement of some of these maintenance payments in arrears in the United Kingdom. In a previous incarnation as a country solicitor in Scotland, I always found it immensely difficult to get hold of people to enforce a matrimonial aliment and other orders if the absent father left the jurisdiction of the court. Under the Maintenance Orders (Reciprocal Enforcement) Act 1972 it was certainly possible to enforce a maintenance order made by the UK courts on behalf of a UK resident, and it had to be registered because of the procedure involved. That can eventually be deployed in courts in other countries. It is a complicated process. It is known as the REMO procedure and a CSA website gives helpful details of it. It is cumbersome and difficult. There are two hopeful signs on the legal horizon. The first is that the Hague convention looked at this in November 2007 and a new global convention on international recovery of child support and other forms of family maintenance was finalised. That new Hague convention was intended to provide a much reduced bureaucracy—a swift, cost-effective more accessible and fair procedure—to allow international recovery. The convention was signed by the United States immediately. I think that it is expected that the European Union, through the Commission, will commit all EU countries to the convention shortly. I understand that the European Union has looked at this matter separately. I know a little bit about it because I sit on your Lordships’ Sub-Committee G, which looks at social policy. In 2004, the Commission published a Green Paper on this matter. In 2005, it published an impact assessment to look at different options. The aim is to replace the diverse provisions that underpin reciprocal arrangements between EU countries with a specific regulation that deals with international maintenance cases. Will the Minister confirm that Britain intends to sign up to the new Hague convention and, if so, when will CMEC and its client group be able to take advantage of its provisions? Will he confirm that the European Union is likely to agree with a specific Council regulation? More generally, what additional steps can the Government take to allow child maintenance orders under the CMEC provisions to be directly enforced abroad? In this global day and age, it is not beyond the realms of possibility that this will become an even bigger problem than it has been in the past, as foreign travel and people’s movements around the globe become more extensive and prolific. Perhaps I may say a few words about Clauses 26, 27 and 28, which relate to curfew orders, prison provision and driving licences. These penalties are now more or less discredited. Curfew orders are a nugatory waste of space, time and effort. They will provoke non-resident parents who set their face against the Act to look for curfew orders, which will not in any way, shape or form be a deterrent. I can understand that they give comfort to the red-top, tabloid press, which will say that the Government are being tough on deadbeat dads and other such nonsense, but they are a distraction and discredit the proper work of the commission, which is to get money out of non-resident parents if they refuse to pay or delay in doing so. Curfew orders create much administrative distraction and displacement of activity. In the court of public opinion—let us disregard human rights challenges under the European convention—they are more trouble than they are worth. The same is true of prison provision. As with curfew orders, putting people in jail costs the taxpayer extra money, but it gets no extra money for the parent with care. It does not affect liability positively for anyone. I would be much happier if we removed the provision for imprisoning people for these offences and concentrated on some of the important improvements that the Government are making, such as attacking joint accounts. It is important to concentrate on what produces money, what avoids human rights legislation cases and the core activity of the commission. It is my experience that, if one takes away someone’s driving licence, they just drive anyway, which has perverse consequences for those who have accidents because that person is driving uninsured. I do not have evidence or figures for that. It is always easy to say of the enforcement powers in the three clauses, “Well, the Government or the commission will have them available. They are always a prospective threat and that might make people a bit more responsive to their duties and legal responsibilities”. For my money, I would rather we had a cut-down, nuts and bolts, reduced revision of the way we attack sources of money, because the public perfectly well understand that if money is owed, you attack the money source. People find it difficult to understand why people are sent to jail at vast cost, even if it is only for a short time. Never mind the high principle of human rights; from a practical point of view, this is a distraction and it does not work. I am very sceptical about it. We should do something else with the time of the staff in order to realise money for parents with care. I hope that the Government will think carefully about this.
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Baroness Hollis of HeighamI dissociate myself from the remarks of the noble Lord, Lord Kirkwood. If someone is in regular employment and there ar…
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Baroness Hollis of HeighamLabour
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I dissociate myself from the remarks of the noble Lord, Lord Kirkwood. If someone is in regular employment and there are money resources, the situation is straightforward. You can put a direct debit on the account via the employer and get the money. The problem arises with the self-employed and those with no money resources. That happens with the young, the feckless, those who change jobs rapidly and so on. How do we make the sanctions bite if there are no financial resources on which to do so? No one wants to take a passport away, no one wants to take a driving licence away and certainly no one wants to see someone go to prison. I presume that we would all much prefer to see community sentences and the like. But there have to be sanctions if even the statutory system is not to be voluntary, let alone to allow the voluntary system to remain in effect. The difficulty is that those who are reluctant to pay and fail to do so are often precisely those who do not own a house, so we cannot get a garnishee order; they do not have goods worth seizing, so bailiffs cannot be used; and they are not in regular, steady PAYE employment on which a direct debit can produce a flow of money. Where do you go except to the individual concerned? I agree absolutely with the noble Lord that no one wants to do this. It is counterintuitive to go for a prison order which stops him working, a curfew order which makes him angry or the removal of his driving licence which runs the risk of him driving uninsured. But if we do not have access to the individual’s financial resources, and with this difficult group we very often do not, where do we go, apart from saying that there are no sanctions to apply? That is why I hope that my noble friend will persist in this. I hope that the success of the new system and CMEC will mean that there will be no need to use these sanctions, but I believe that they are necessary as a back-up in order to get some non-resident parents to take their responsibilities seriously.
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Lord McKenzie of LutonThis is an important group of amendments, all of which relate in some way to the operation of the commission’s enforcem…
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Lord McKenzie of LutonLabour
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This is an important group of amendments, all of which relate in some way to the operation of the commission’s enforcement regime, although each amendment produces a number of issues within itself. For that reason, I would like to address them under separate headings. I will make reference to the one government amendment in the group and then deal more generally with the clause stand part issues that have been raised. Amendment No. 103 would give the parent with care the right to make representations to or attend any enforcement hearings. It would also allow the parent with care to apply directly to the court or the tribunal for enforcement action. I recognise that this is an issue of major concern and indeed I welcome the chance to debate it. The parent with care’s role in enforcement was discussed in the other place and was raised by the Select Committee on Work and Pensions. It is therefore something about which we have thought long and hard. I accept entirely that the commission needs to engage the parent with care when taking enforcement action against the defaulting non-resident parent. Indeed, it would be beneficial for the parent with care to disclose to the commission any information that he or she may have that is relevant to the non-resident parent’s financial situation. But we need to remind ourselves of the commission’s role. Once a case has reached the state maintenance service, the commission is responsible for taking action to enforce payments. However, it has to be mindful of the position not just of the parent with care but of any other parents with care involved with the non-resident parent. It also, of course, needs to consider the welfare of any children that may be affected.
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Lord SkelmersdaleThis will be the subject of a discrete amendment a little later today.
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Lord SkelmersdaleConservative
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This will be the subject of a discrete amendment a little later today.
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Lord McKenzie of LutonWe are dealing with Amendments Nos. 179 and 180, which are still in this group, as I understand it. The noble Lord may…
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Lord McKenzie of LutonLabour
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We are dealing with Amendments Nos. 179 and 180, which are still in this group, as I understand it. The noble Lord may be referring to travel documentation.
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Lord SkelmersdaleI am, yes.
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Lord SkelmersdaleConservative
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I am, yes.
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Lord McKenzie of LutonWe have a separate amendment on that, but we are touching on driving licences here. There is a discrete amendment, but…
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Lord McKenzie of LutonLabour
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We have a separate amendment on that, but we are touching on driving licences here. There is a discrete amendment, but these amendments are part of this group. However, the noble Lord is right that we have also strayed into travel authorisation. I shall skip that part of my notes and return to it later. Amendment No. 181 would set out in primary legislation that the commission must consider the impact on the non-resident parent’s ability to pay the outstanding child maintenance should he or she be disqualified from holding or obtaining a driving licence. I agree that it is important that, before such a measure is imposed, consideration is given to whether a non-resident parent needs a driving licence to earn a living. That is precisely why new Section 40B(A4)(a) in Clause 28 as well as existing legislation on how the current process operates make it clear that the court should, in the presence of the non-resident parent, inquire whether the driving licence is needed by him to earn a living. I appreciate that noble Lords may therefore question why the commission is not duty bound to consider this as well before making an application to the court. However, including such a provision in the legislation is not necessary.
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Lord SkelmersdaleWhy?
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Lord SkelmersdaleConservative
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Why?
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Lord McKenzie of LutonI am just about to cover that. The Child Support Agency, or the commission in the future, will make an application to t…
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Lord McKenzie of LutonLabour
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I am just about to cover that. The Child Support Agency, or the commission in the future, will make an application to the court based on a determination of the facts at hand. Where the agency or the commission are aware of the non-resident parent’s occupation, this factor will be taken into account in determining whether an application will be made for disqualification. The CSA or the commission is highly unlikely to ask the court to disqualify the non-resident parent from driving if the non-resident parent’s ability to earn a living would be seriously affected. This would not be in the best long-term interests of the children and it would be against the commission’s main objective. Ultimately, however, it will be the court’s decision. The court has the power to summon the non-resident parent, to issue a warrant should he or she fail to appear, and to inquire in that person’s presence whether he or she needs a driving licence to earn a living, before it reaches a decision. I should also point out that the existing driving licence provisions have been in operation since 2001. In the vast majority of cases, the non-resident parent receives an actual or suspended sentence. Clause 28 simply restructures existing provisions. Amendment No. 187 would enable the Secretary of State to make regulations allowing the commission to recover maintenance payments from non-resident parents who have moved outside the United Kingdom and do not remain in the commission’s jurisdiction by virtue of Section 44 of the Child Support Act 1991—an issue raised by the noble Lord, Lord Kirkwood, in some detail. That section gives the CSA currently, and the commission in the future, jurisdiction where all parties to the maintenance calculation are resident in the United Kingdom, except in prescribed circumstances where the non-resident parent may reside abroad but is employed in the services of the Crown; in the forces, including as a reservist; by a company registered in the UK; or by a body of prescribed description. I agree that it would not be right for non-resident parents outside these limited exemptions to escape their financial obligations towards their children by moving abroad, but I am pleased to inform noble Lords that this is generally not the case. The United Kingdom has a system for administering international child and spousal maintenance cases. There are a number of international conventions and agreements—the noble Lord, Lord Kirkwood, referred to these—which allow maintenance claims from UK-resident parents to secure payments from non-resident parents who move abroad. International agreements include the Hague conventions and EU law, and of course arrangements are established under the Maintenance Orders (Reciprocal Enforcement) Act 1972. In essence, the system works by UK courts sending details of the maintenance liability to a foreign jurisdiction where the claimant is resident in the UK. The foreign jurisdiction then applies its domestic collection and enforcement mechanisms to recover the amount due. Those mechanisms in turn refer the maintenance received to the claimant. The process is reversed where the debtor is resident in the UK and the claimant resides outside. Where a non-resident parent is or moves outside the Child Support Agency’s jurisdiction, a maintenance calculation cannot be made or pursued. The parent with care must then either reach an agreement for maintenance provisions with the non-resident parent or apply to their local magistrates’ court or family proceedings court to secure maintenance from an ex-partner living abroad. The UK has reciprocal agreements with over 100 states and territories to enable such claims to be made and recently established a new bilateral agreement with the USA to extend the arrangements there. There is currently an EU proposal for a new regulation—referred to by the noble Lord, Lord Kirkwood—on such claims in Europe, which the UK hopes to be able to opt into at the conclusion of negotiations. I have no precise data on when we expect those negotiations to be concluded. I am also pleased to inform the Committee that a new global Hague convention on family maintenance was successfully concluded in November 2007, which we hope will further extend the coverage of such arrangements in the future. I realise that Members of the Committee may be concerned about what happens to any outstanding arrears that the non-resident parent may owe when he or she moves outside the commission’s jurisdiction. I do, of course, have the greatest sympathy with parents with care who find themselves in this situation, but it would not be possible for the commission to take direct action to recover the money owed, nor could the arrears be included within any subsequent international maintenance order made through the courts. I am sure that Members of the Committee will understand that we cannot apply UK domestic legislation across international boundaries. We could not, for example, give the commission the power to apply a deduction from earnings order against any person where the employer is not registered as a company within the UK. It is simply not possible. Nor is it currently possible under the terms of the 1972 Act to include arrears of child maintenance accrued in the UK within an international maintenance order. We do not, however, rule anything out in the longer term; this may be something that we can address at a future legislative opportunity. It may also be the case that, should the non-resident parent have any property within the United Kingdom, the CSA or the commission could apply for a charging order against that property, notwithstanding the fact that the non-resident parent may reside outside the UK. We will certainly continue to investigate that possibility. I hope that Members of the Committee will appreciate that an adequate system for dealing with non-resident parents who move abroad already exists, albeit with the caveat concerning arrears that I have just mentioned Amendment No. 213 would give the appeals tribunal the power to question the underlying maintenance calculation when considering a liability order appeal. By the time a liability order is made, the non-resident parent will already have had opportunity to appeal to the tribunal against the maintenance calculation at the point when it was made; there are also provisions for late appeals. This amendment would allow the non-compliant non-resident parent a second bite at the cherry. It could delay enforcement action and be additional work for the appeals tribunals. We are, however, putting appropriate safeguards in place by providing appeal rights based on those matters that magistrates can currently consider when making a court liability order. The appeals tribunal will have the opportunity to question whether the person is liable, whether they have failed to pay an amount of child maintenance and if the amount of the liability order exceeds the amount of maintenance owing. It is important to remember that a liability order is made because the non-resident parent has failed to pay. If we give them another opportunity to challenge the maintenance calculation, it will be another opportunity to delay payment for their children. We know, sadly, that some will use every opportunity to do that. Finally, on the Government’s Amendment No. 219, following concerns raised over the recovery of historic debt as this Bill has progressed through the other place, we are introducing this amendment to ensure that all new and existing powers to collect child maintenance can be used on debts of any age. We have previously amended regulations so that there is no longer a six-year time limit for an application for a liability order on debt that accrued on or after 13 July 2000. However, some debt had already reached six years of age before then and so is still subject to a limitation period. We estimate that this pre-July 2000 debt accounts for more than £700 million. It can currently be collected only through a deduction-from-earnings order and not through court-based recovery methods. The amendment ensures that, when the provision for the new administrative liability order comes into force, the same enforcement mechanisms—liability orders, deduction orders, deduction-from-earnings orders—can be available for use on all child maintenance debt regardless of the date on which it accrued. However, the new administrative liability order will not be used in relation to pre-July 2000 debt as a matter of course. Because this debt was previously time-barred as far as court action was concerned, it will be important to consider in each case whether enforcement action is justified. I shall speak as briefly as I can to the issues raised under clause stand part and deal first with Clause 26 and curfew orders. As both my noble friend Lady Hollis and the noble Lord, Lord Kirkwood, recognised, those are at the extreme end of our enforcement process, but they are important. Clause 26 enables the Child Maintenance Enforcement Commission to make an application to the court for a curfew order where the non-resident parent wilfully refuses or culpably neglects to pay maintenance. Curfew orders are intended to serve as an effective alternative to committal. They should not interfere with the non-resident parent’s ability to earn a living and should allow him or her to continue with any pre-existing contact or custody arrangement with the children. That is an important point. At the same time, however, they will provide a powerful incentive to co-operate. Furthermore, it is envisaged that the use of such powers will contribute to changing the culture of non-compliance and demonstrate that the commission will take strong measures to deal with it swiftly. The length of the curfew order will be at the discretion of the court. Electronic monitoring has been operating throughout England and Wales since 1999 and is run by private companies. About 15,500 persons are subject to electronic monitoring at any one time; about 58 per cent of people complete a curfew order successfully without any enforcement action being applied.
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Lord Kirkwood of KirkhopeThe Minister is working very hard, and we are all grateful for that, but the logic of the noble Baroness’s case was tha…
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Lord Kirkwood of KirkhopeLiberal Democrat
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The Minister is working very hard, and we are all grateful for that, but the logic of the noble Baroness’s case was that the measures would be resorted to only after the financial routes had been exhausted. Will that always be the case?
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Lord McKenzie of LutonIt will certainly generally be the case; we want to use the whole panoply of enforcement action available before we rea…
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Lord McKenzie of LutonLabour
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It will certainly generally be the case; we want to use the whole panoply of enforcement action available before we reach the orders. I am not sure that I could say that that will be the situation in every case. In any event, our estimate is that there may be 700 to 750 cases per year maximum to which the orders might apply, so it is a relatively small percentage of the likely total case load of the CSA. It would be pretty much a last resort, but preferable to committal proceedings, where there are the issues that I outlined, such as the ability to continue with contact arrangements. I have perhaps said enough about why we think that those are important provisions and why we want to retain them in the Bill. The noble Lord also referred to committal to prison under Clause 27. The Child Support Agency can already apply to the court seeking to have a non-compliant non-resident parent committed to prison for a maximum of six weeks. The clause simply restructures the existing provisions to be consistent with other provisions in the Bill. The clause will aid the effective operation of the existing committal provisions and we certainly want it to stand part of the Bill. On disqualification from driving, the CSA can currently apply to the court to seek to have the non-resident parent disqualified from holding or obtaining a driving licence for up to two years. Again, the changes to the driving disqualification panels align amendments to the existing committal orders, the new legislation on curfew orders and the administrative power to disqualify the non-resident parent from holding or obtaining travel authorisation. That is an important part of our armoury to ensure that we have effective compliance. Having said all that, I ask noble Lords not to press the amendments, with the exception of offering support for the government amendment, for the reasons that I have outlined.
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Baroness Hollis of HeighamDoes not my noble friend agree that one difficulty with the CSA, unlike other fields where debt is owed, is that you ca…
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Baroness Hollis of HeighamLabour
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Does not my noble friend agree that one difficulty with the CSA, unlike other fields where debt is owed, is that you cannot go for a lot of conventional remedies to collect debt—for example, naming and shaming—precisely because there are named and known children involved? It is quite hard to get enforcement procedures that bear on the parent when he does not have property but that do not stigmatise the child. With a lot of debt collection, you can use an element of naming and shaming, public display and so on. It is precisely to protect the children that you cannot do that in this case, which is why we are short of penalties. That is why my noble friend is right to say that, although the provisions are there as a last resort, they need to be there.
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Lord McKenzie of LutonI agree entirely with my noble friend. There was a brief interlude of naming and shaming on the website, but that quick…
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Lord McKenzie of LutonLabour
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I agree entirely with my noble friend. There was a brief interlude of naming and shaming on the website, but that quickly disappeared. It is right that it did, for the reasons that my noble friend has given.
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Lord SkelmersdaleIn withdrawing the amendment, I certainly agree with the noble Baroness, Lady Hollis, that there are very few effective…
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Lord SkelmersdaleConservative
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In withdrawing the amendment, I certainly agree with the noble Baroness, Lady Hollis, that there are very few effective sanctions for many of the people whom we have been talking about and therefore I say to the noble Lord, Lord Kirkwood, that it is a great mistake to do away with any of them. I may be straying into the next group of amendments by saying this, but that is a different matter from saying that the way in which the sanctions are triggered is necessarily correct in the Bill. However, the sanctions most certainly should be used. I accept some of the points made by the Minister. I recognise that buried somewhere in the Bill is the fact that there will be no application for the removal of a driving licence if it would affect an individual’s earning capacity. But there are other sanctions that could affect earning capacity, which is why we tabled the amendment. I shall look carefully at what the Minister has said in response. The positive point made by the Minister was that it is quite right that CMEC should engage with the parent with care. What he apparently does not accept is that the parent with care should trigger that engagement. I must ask why not. We are not moving at the pace of an E-type Jaguar today, so perhaps the noble Lord would like to consider the question and come back to me in writing.
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Lord McKenzie of LutonI had hoped that I had covered the point, but I shall look at the record on this large grouping and write to the noble…
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Lord McKenzie of LutonLabour
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I had hoped that I had covered the point, but I shall look at the record on this large grouping and write to the noble Lord.
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Lord SkelmersdaleIn that case, I have pleasure in begging leave to withdraw the amendment. Amendment, by leave, withdrawn. Schedule 5 [M…
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Lord SkelmersdaleConservative
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In that case, I have pleasure in begging leave to withdraw the amendment. Amendment, by leave, withdrawn. Schedule 5 [Maintenance calculations: transfer of cases to new rules]: [Amendments Nos. 104 to 107 not moved.] Schedule 5 agreed to. Clause 19 [Use of deduction from earnings orders as basic method of payment]:
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Lord Skelmersdalemoved Amendment No. 108:
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Lord SkelmersdaleConservative
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moved Amendment No. 108:
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Lord McKenzie of LutonThe amendments give us the opportunity to discuss the appeals route for deduction from earnings orders when used as a b…
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Lord McKenzie of LutonLabour
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The amendments give us the opportunity to discuss the appeals route for deduction from earnings orders when used as a basic method of collecting child maintenance. Amendments Nos. 108 to 110 apply specifically to appeals against a decision by the commission that there is no good reason not to apply a deduction from earnings order as a basic method of collection. They would mean that the appeals would be heard by a tribunal and not by the magistrates’ court, or, in Scotland, by the sheriff, as currently proposed in the Bill. Where regulations are made allowing deduction from earnings orders as a basic method of collection, they will include provision for such an order not to be made where there would be good reason not to do so. In deciding the most appropriate method of collection, the commission will consider any representations from the non-resident parent. Matters to be taken into account when considering what constitutes a good reason will be set out in such regulations, but it is envisaged that they will be related primarily to concerns about privacy issues. An example might be where a non-resident parent is employed in a family business and wishes to keep any details of child maintenance private. The intention is for the commission to pilot the approach of using deduction from earnings orders as a basic method of collection. The criteria for what constitutes a good reason will be further developed from lessons learnt from the pilot if this policy is to be fully rolled out. Deduction from earnings orders, as they currently operate, are part of the Child Support Act 1991. There are appeal routes to a magistrates’ court, or, in Scotland, to the sheriff. There is no evidence that this system does not work effectively or is inappropriate. We have considered whether to make different arrangements for this type of appeal when deduction orders are used as a basic method of collection, but we are confident that magistrates, with their wide range of experience examining decisions and evidence, are well equipped to deal with appeals of this nature, and we see no good reason why these appeals should go elsewhere. We have therefore decided to adopt a consistent approach on appeal routes for deduction from earnings orders and to continue with the magistrates’ courts, and with the sheriff in Scotland. Amendments Nos. 165, 168, 169 and 173 deal with the route of appeal for deduction orders—in this case, lump sum deduction orders. We considered deduction orders further following debate in the other place, and as a result I plan to table government amendments that increase the scope of these orders. As part of this, we have reconsidered the appropriate routes of appeal. In consultation with the Ministry of Justice, we have concluded that in England and Wales, the county courts are best placed to deal with financial matters such as these. This allows us to benefit from the extensive experience of the county courts in making third-party debt orders. In addition, we recognise the potential complexity of joint account deduction orders, so we intend those appeals to be heard in the High Court. To allow for further consultation with the Scottish Executive to mirror these changes in Scotland, however, we will set out the specific route of appeals in regulations. I hope that that explanation was sufficient, and that the noble Lord will be able to withdraw the amendment.
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Lord SkelmersdaleI am very grateful. I think that I am satisfied, because I was trying to discover whether there had been a thorough exa…
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Lord SkelmersdaleConservative
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I am very grateful. I think that I am satisfied, because I was trying to discover whether there had been a thorough examination of this subject in the steps leading up to the Bill. Quite clearly, there has been. The Minister mentioned a future government amendment on this subject. I assume that that is not the one that we are about to discuss but one that he will table on Report. Am I correct?
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Lord McKenzie of LutonNo. We are about to discuss it; it is on deduction orders.
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Lord McKenzie of LutonLabour
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No. We are about to discuss it; it is on deduction orders.
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Lord SkelmersdaleHaving ascertained what I needed to know, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amend…
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Lord SkelmersdaleConservative
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Having ascertained what I needed to know, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 109 and 110 not moved.] Clause 19 agreed to. Clause 20 agreed to.
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Lord McKenzie of Lutonmoved Amendment No. 111:
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Lord McKenzie of LutonLabour
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moved Amendment No. 111:
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Lord SkelmersdaleThis is a gigantic group of amendments, covering releases offered from bank accounts which may be either ongoing or lum…
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Lord SkelmersdaleConservative
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This is a gigantic group of amendments, covering releases offered from bank accounts which may be either ongoing or lump sum. Indeed, they fall rather neatly into two halves. If CMEC is to have this power, any account may be appropriate in certain circumstances. I originally thought that, by removing the word “current” in Amendments Nos. 111 and 112, the Minister was doing just that. However, as he said, further examination shows that the first half of Amendment No. 117 pushes the decision on which account is appropriate into secondary legislation in new Section 32(3A)(b). That pricked my interest, because delay is not necessarily the right thing to do. I assume that this statutory instrument—or series of statutory instruments, as appropriate—will produce the safeguards the Minister has been talking about. However, will current accounts be included or excluded? That is a fair question. On Amendment No. 120, the credit in a joint account clearly belongs to all the account holders. Would subsection (5)(a) not be better expressed by referring to “account holder or holders”? I suggest this as a simplifying drafting amendment. Would that not cover all types of account, whether held by a single person or group of people? That is appropriate, because Amendment No. 121 says that all the account holders must be informed that money is to be withdrawn from the joint account due to the activities—in this case, the non-payment of maintenance—of one of them. The Minister clearly believes that this will put added pressure on the defaulter because the others will complain to him immediately. In general, he must be right. However, what about the non-resident parent in a new relationship, with or without children, with a joint account? Is it not likely that the other account holder—the new parent with care, although in this case it is a couple—will object strongly to the money being withdrawn? Would this not add substantially to the number of appeals? Amendment No. 124 adds to the pressure, as the deposit holder is allowed to take fees as it would for any other standing order. I assume that the Minister envisages that these amounts from the various accounts would be taken by standing order. The other account holders would be able to get at the defaulting non-resident parent in question. Amendment No.125 compounds this. As far as Amendment No. 127 goes, why is the deposit taker himself being allowed to go to appeal? I simply do not understand that. In Amendment No. 130, it is not appropriate to have a may/shall debate; only comment that if all these chances for the withdrawal of money from accounts are not in the Bill, they must be in the statutory instrument. Amendment No. 134 is a sensible provision defining the parameters of the statutory instrument, although new subsection (1A)(a) is perhaps a little vague and my earlier comments apply. As far as I can see, all the new provisions in Clause 21 are duplicated in amendments to Clause 22, as I said at the beginning, which covers lump sum deduction orders, so the same questions apply. To save time, I am happy to allow the Minister’s answer to cover both clauses, unless he wants to give one that is pertinent to one clause and not to the other, although I doubt it. Amendment No. 156 deserves comment. It would be quite wrong if the account were to be stripped by the other account holder, and I hope that these two long amendments will prevent that. However, seven days’ grace is given before the maintenance due starts to be paid. This will give time for asset stripping so what will happen then, especially if it is done by the non-resident parent? Is this to be a criminal offence? I am afraid I do not understand the reason behind Amendment No. 164 and the removal of proposed new subsection (4), or, indeed, proposed new Section 32G(9). It may be my inattention to detail but why is it still needed? Is it because it duplicates earlier amendments? The same question applies to proposed new subsection (7) on page 16 in Amendment No. 167. I shall have to study the rationale for the other amendments but I hope it will not be necessary to return to this at a future stage of the Bill.
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Lord Kirkwood of KirkhopeFor the avoidance of doubt, I am wholly in agreement with the general thrust of all the amendments. However, I do not u…
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Lord Kirkwood of KirkhopeLiberal Democrat
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For the avoidance of doubt, I am wholly in agreement with the general thrust of all the amendments. However, I do not understand all of the detail and I should like to study what the Minister has said. In addition—I do not know whether he made any reference to this in his earlier remarks—in relation to both the current account and the lump sum deduction orders, the proposed regulations in Amendments Nos. 117, 134 and 156 contain caveats which state that regulations will specify that an order cannot be made in respect of an account of a prescribed description. As that applies to both current account and lump sum deduction orders it would be helpful—the Minister may have glancingly referred to this earlier—if the Minister could let me know, if not today then at some other stage, exactly what those exclusions were designed to try to catch. Otherwise they take away the rationale for my later Amendments Nos. 115 and 174. I am wholly in agreement with the general thrust of these amendments.
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Lord McKenzie of LutonI shall try to respond to as many of those points as I can. The noble Lord, Lord Skelmersdale, raised many detailed poi…
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Lord McKenzie of LutonLabour
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I shall try to respond to as many of those points as I can. The noble Lord, Lord Skelmersdale, raised many detailed points and I shall need to read the record and respond more specifically on some of them. On the issue of removing the term “current account” from the text, this is because, when we thought about it, focusing only on current accounts was not very helpful, particularly as these days a number of people will have deposit accounts, investment accounts, current accounts and moneys swept between them. It was not potentially going to catch very much. This caused us to recast the arrangements and to differentiate not so much in terms of accounts by and large, but between regular deductions and lump sum deductions. Regular deductions are those which are likely to be taken monthly. They could be related to arrears as well as current liabilities, but they would be taken routinely. Obviously there are different considerations in respect of lump sum deductions, which touch upon arrears. That is the basis on which this is structured.
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Lord SkelmersdaleI do not want to go into any more detail at this point, but surely with the lump sum deductions, as the system does not…
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Lord SkelmersdaleConservative
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I do not want to go into any more detail at this point, but surely with the lump sum deductions, as the system does not allow the account to go into negative equity, as it were, there may well be a case where you take several lump sums from the same account over a period, in which case they would be fairly regular deductions.
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Lord McKenzie of LutonI do not think anything proposed here would preclude more than one go at a lump sum. But there is a distinction between…
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Lord McKenzie of LutonLabour
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I do not think anything proposed here would preclude more than one go at a lump sum. But there is a distinction between them. If there is a lump sum which deals with arrears, and then arrears subsequently build up again, another process for another lump sum would be perfectly possible. The noble Lord is quite right to say that there is a limit in these arrangements that states that the account cannot go overdrawn. But you can have more than one bite at the lump sum; you can take it in tranches when there is funding in the account. Also, of course, the first stage of the lump sum process is a freezing of the accounts. This at least keeps the accounts whole so that the assets cannot be dissipated very quickly. Although a process may be under way, that does not preclude alienating the assets in the interim. But the processes being administrative, they should be speedy and limit the scope for that. I was going on to explain why some of the limitations are in regulations and why we need to reflect on them in relation to lump sum deductions, particularly on business accounts. We are not proposing to start with business accounts because if a lump sum was taken from a business account it could have quite a significant impact on that business, particularly if there was a freezing of the resources in that account. It could have all sorts of ramifications for the wages bill, for dealing with suppliers and for the survival of the business. So that is quite a difficult one.
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Lord SkelmersdaleI am most grateful. As the Minister has not answered all the points and he will have to write to me, perhaps I may put…
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Lord SkelmersdaleConservative
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I am most grateful. As the Minister has not answered all the points and he will have to write to me, perhaps I may put a thought into his mind. As I understand the situation proposed, there is a leeway of seven days before the operation starts. In these days of electronic transfer of money and so on, there is a potential difficulty. The noble Lord is shaking his head. Have I got it wrong?
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Lord McKenzie of LutonThere is a seven-day period somewhere in all of this but I think not where the noble Lord has identified. We need to re…
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Lord McKenzie of LutonLabour
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There is a seven-day period somewhere in all of this but I think not where the noble Lord has identified. We need to revert on that to avoid any confusion.
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Lord SkelmersdaleHeaven forbid. The noble Lord might have a sample of my handwriting and the letters might be reciprocal. On Question, a…
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Lord SkelmersdaleConservative
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Heaven forbid. The noble Lord might have a sample of my handwriting and the letters might be reciprocal. On Question, amendment agreed to.
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The Chairman of Committees (Lord Brabazon of Tara)I should point out that if Amendment No. 112 is agreed to I shall not be able to call Amendment No. 113.
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The Chairman of Committees (Lord Brabazon of Tara)Conservative
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I should point out that if Amendment No. 112 is agreed to I shall not be able to call Amendment No. 113.
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Lord McKenzie of Lutonmoved Amendment No. 112:
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Lord McKenzie of LutonLabour
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moved Amendment No. 112:
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Lord Skelmersdalemoved Amendment No. 114:
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Lord SkelmersdaleConservative
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moved Amendment No. 114:
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Lord McKenzie of LutonI am not sure that item is in this group.
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Lord McKenzie of LutonLabour
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I am not sure that item is in this group.
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Lord SkelmersdaleIt is not in the right place. I had better stop at this point. I beg to move.
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Lord SkelmersdaleConservative
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It is not in the right place. I had better stop at this point. I beg to move.
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Lord McKenzie of LutonPerhaps I may start with Amendment No. 135, which seeks not to exclude deduction orders from being used against account…
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Lord McKenzie of LutonLabour
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Perhaps I may start with Amendment No. 135, which seeks not to exclude deduction orders from being used against accounts that can be used only partly for business purposes. In light of the government amendment, of course, this amendment will no longer be appropriate, as the amended clauses will now remove such exclusions. Following on from that, Amendment No. 114 also seeks to extend the scope of deduction orders to all accounts. As we have made clear, we intend to expand the remit of deduction orders, but we do not think it appropriate from day one for deduction orders to be used on every type of account. As I outlined earlier, we would like to see accounts such as those held by more than one person for the purposes of business initially excluded by secondary legislation. I hope noble Lords will agree that although increasing the remit of deduction orders in the Bill is a positive way to enable the commission to collect more maintenance, it is important to allow sufficient opportunity to consider carefully how far that remit should be extended. I trust that this also addresses the issue raised by Amendment No. 115, which seeks to expand the current account deduction orders to any joint trade or business account. Amendments Nos. 137, 140, 141, 144, 147, 149 and 155 would prevent lump-sum deduction orders being used in relation to anyone other than licensed deposit takers. During consideration of this group of amendments, we have been unable to find any reference to licensed deposit takers in current legislation. I think that the term used to exist in old banking legislation, but went out in the mid or late 1980s. As a result, we are not quite sure how critical it is.
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Lord SkelmersdaleI thought that the Minister was going say the late 1800s.
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Lord SkelmersdaleConservative
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I thought that the Minister was going say the late 1800s.
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Lord McKenzie of LutonThe amendment could be used to open loopholes or to encourage non-compliant parents to lodge their money with people wh…
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Lord McKenzie of LutonLabour
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The amendment could be used to open loopholes or to encourage non-compliant parents to lodge their money with people who are not covered by the term “deposit taker”. We would like to prescribe others who are likely to hold money on behalf of the non-resident parent in secondary legislation—an issue that I also touched on earlier. We are currently further investigating those funds not held in accounts that might be prescribed for the purposes of lump sum orders. However, the amendment would mean money held on behalf of the non-resident parent by, for example, lawyers and accountants would be inaccessible to the commission. That was probably not intended, but it would be the import of the amendment. On Amendments Nos. 119 and 151, I assure noble Lords that in both instances the clauses already achieve what the amendments strive for in that there is already a power to include in regulations a requirement on the deposit taker to provide details of when an account is closed. Indeed, the banks have an obligation to notify the commission if the NRP closes the account or opens other accounts, where that information is available to the banks. In the case of a lump-sum deduction order, the greatest amount at which the order will be set is the amount of arrears stated when the order was first made. It cannot be increased beyond that amount and is intended to be collected in one payment rather than over a period. However, it is acknowledged that the order will continue where there is an insufficient amount available to be deducted in that one payment. Again, we touched on that earlier. Amendment No 126 would remove the power of the Secretary of State to provide in regulations for the circumstances in which a request may be made for a review of a deduction order. It is worth noting that this particular subsection is extended as part of the Government’s amendments. It now includes a regulation-making power to provide a right for the parties affected by an order imposed, including joint account holders, to request a review. This is not an appeal. The amendment would allow regulations providing for the order to be varied, but only on the initiative of the commission. It would not allow for an application for a review by the non-resident parent. At this stage, we envisage that the right to request a review will be available in cases of hardship or a significant change of circumstances. We are however happy to hear views on the appropriate grounds for review. All the regulations relating to this clause will be subject to the affirmative procedure. Finally, Amendment No. 116 seeks to require the commission to impose an order that applies to maintenance arrears, to ongoing maintenance, or to both. In reality, however, these are the only three options. The current drafting is permissive in recognition that we give the commission the option to use regular deduction orders to collect both past and future maintenance. I therefore urge the noble Lord to withdraw the amendment.
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Lord SkelmersdaleTwo points arise from what the Minister has said. First, not all the amendments are in my name. Amendment No. 115, for…
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Lord SkelmersdaleConservative
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Two points arise from what the Minister has said. First, not all the amendments are in my name. Amendment No. 115, for example, is not. It is in the name of the noble Lord, Lord Kirkwood, and I do not know whether he wants to speak. Secondly, the fact that there may be no definition of a licensed deposit holder in legislation is no bar on me coining a term for the purposes of an amendment. I still find the idea of the third party extremely confusing. Perhaps the Minister might look at that again. If closing one account and opening another took place in the same financial institution, that would be obvious, and CMEC would be informed if the order had that effect, which I am sure it will. However, if one transfers from, let us say, Barclays to NatWest, that is a totally different matter, and the defaulting non-resident parent would continue to be in default of their obligations until the system caught up with them. That is not a very happy arrangement.
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Lord McKenzie of LutonI shall reflect on the drafting, but I have tried to do battle with parliamentary counsel in the past and invariably lo…
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Lord McKenzie of LutonLabour
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I shall reflect on the drafting, but I have tried to do battle with parliamentary counsel in the past and invariably lost. If there was a transfer from one bank to another, the transferring bank would generally know to whom the money was going. That would not be the case if someone withdrew the readies and then deposited them in another bank—or at least the first destination on the transfer, if not the final destination.
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Lord SkelmersdaleI seem to remember that there are vast amounts of legislation about money-laundering.
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Lord SkelmersdaleConservative
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I seem to remember that there are vast amounts of legislation about money-laundering.
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Lord McKenzie of LutonDoes that not help rather than hinder the case?
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Lord McKenzie of LutonLabour
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Does that not help rather than hinder the case?
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Lord SkelmersdaleI doubt it very much.
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Lord SkelmersdaleConservative
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I doubt it very much.
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Lord AddingtonMost of the amendments in this group have been dealt with in what the Government have said previously, so we will not m…
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Lord AddingtonLiberal Democrat
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Most of the amendments in this group have been dealt with in what the Government have said previously, so we will not move those to which we have put our name.
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Lord SkelmersdaleI shall not prolong the discussion. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments…
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Lord SkelmersdaleConservative
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I shall not prolong the discussion. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 115 and 116 not moved.]
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Lord McKenzie of Lutonmoved Amendments Nos. 117 to 118:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 117 to 118:
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Lord McKenzie of Lutonmoved Amendments Nos. 120 to 125:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 120 to 125:
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Lord McKenzie of Lutonmoved Amendments Nos. 127 to 133:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 127 to 133:
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The Chairman of CommitteesIf Amendment No. 134 is agreed to, I shall not be able to call Amendment No. 135 for reasons for pre-emption.
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The Chairman of CommitteesConservative
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If Amendment No. 134 is agreed to, I shall not be able to call Amendment No. 135 for reasons for pre-emption.
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Lord McKenzie of Lutonmoved Amendment No. 134:
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Lord McKenzie of LutonLabour
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moved Amendment No. 134:
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Lord McKenzie of Lutonmoved Amendment No. 136:
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Lord McKenzie of LutonLabour
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moved Amendment No. 136:
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Lord McKenzie of Lutonmoved Amendment No. 138:
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Lord McKenzie of LutonLabour
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moved Amendment No. 138:
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The Chairman of CommitteesIf Amendment No. 139 is agreed to, I shall not be able to call the following two amendments in the name of the noble Lo…
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The Chairman of CommitteesConservative
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If Amendment No. 139 is agreed to, I shall not be able to call the following two amendments in the name of the noble Lord, Lord Skelmersdale, for reasons of pre-emption.
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Lord McKenzie of Lutonmoved Amendment No. 139:
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Lord McKenzie of LutonLabour
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moved Amendment No. 139:
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Lord McKenzie of Lutonmoved Amendments Nos. 142 to 144:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 142 to 144:
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Lord McKenzie of Lutonmoved Amendment No. 146:
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Lord McKenzie of LutonLabour
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moved Amendment No. 146:
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Lord McKenzie of Lutonmoved Amendment No. 148:
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Lord McKenzie of LutonLabour
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moved Amendment No. 148:
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Lord McKenzie of Lutonmoved Amendment No. 150:
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Lord McKenzie of LutonLabour
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moved Amendment No. 150:
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Lord McKenzie of Lutonmoved Amendments Nos. 152 to 154:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 152 to 154:
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Lord McKenzie of Lutonmoved Amendment No. 156:
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Lord McKenzie of LutonLabour
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moved Amendment No. 156:
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The Chairman of CommitteesIf Amendment No. 157 is agreed to, I shall not be able to call Amendment No. 158, which is in the name of the noble Lor…
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The Chairman of CommitteesConservative
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If Amendment No. 157 is agreed to, I shall not be able to call Amendment No. 158, which is in the name of the noble Lord, Lord Skelmersdale, for reasons of pre-emption.
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Lord McKenzie of Lutonmoved Amendment No. 157:
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Lord McKenzie of LutonLabour
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moved Amendment No. 157:
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Lord McKenzie of Lutonmoved Amendments Nos. 159 to 164:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 159 to 164:
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Lord McKenzie of Lutonmoved Amendment No. 166:
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Lord McKenzie of LutonLabour
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moved Amendment No. 166:
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The Chairman of CommitteesIf Amendment No. 167 is agreed to, I shall not be able to call Amendment No. 168 for reasons of pre-emption.
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The Chairman of CommitteesConservative
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If Amendment No. 167 is agreed to, I shall not be able to call Amendment No. 168 for reasons of pre-emption.
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Lord McKenzie of Lutonmoved Amendment No. 167:
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Lord McKenzie of LutonLabour
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moved Amendment No. 167:
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Lord McKenzie of Lutonmoved Amendments Nos. 170 to 171:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 170 to 171:
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The Chairman of CommitteesIf Amendment No. 172 is agreed to, I shall not be able to call Amendment No. 173 for reasons of pre-emption.
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The Chairman of CommitteesConservative
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If Amendment No. 172 is agreed to, I shall not be able to call Amendment No. 173 for reasons of pre-emption.
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Lord McKenzie of Lutonmoved Amendment No. 172:
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Lord McKenzie of LutonLabour
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moved Amendment No. 172:
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Lord Addingtonmoved Amendment No. 174:
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Lord AddingtonLiberal Democrat
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moved Amendment No. 174:
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Lord McKenzie of LutonIn speaking to Amendment No. 174, I shall speak also to government Amendments Nos. 175 to 177, 215 and 217. I thank the…
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Lord McKenzie of LutonLabour
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In speaking to Amendment No. 174, I shall speak also to government Amendments Nos. 175 to 177, 215 and 217. I thank the noble Lord for moving Amendment No. 174, which seeks to give the commission the power to make an administrative freezing order in relation to any real property and capital as soon as a non-resident parent has missed a payment of child support maintenance. As part of this group I propose government amendments which enable the freezing of non-resident parents’ assets. I hope that my explanation of these amendments will cover the point raised. In Committee in another place, the Government agreed to consider an amendment that would provide the commission with a power to apply, in appropriate circumstances, to the court for a freezing order. Following that consideration, the Government agree that this would be a useful addition to the commission’s enforcement tools. The government amendment would apply where there is evidence that a non-resident parent is about to dispose of assets or remove them from the commission’s jurisdiction with the intention of avoiding payment of child maintenance. It would enable the commission to apply to the court for an order freezing those assets. Indeed, we propose to go one stage further. The government amendment would also enable the commission to ask the court to satisfy the disposition which had already been made. The court will also be given the power to make consequential directions and orders as it sees fit to give effect to the order. The number of cases in which the commission will have firm evidence of the non-resident parent’s intention to dispose of his assets is likely to be very small; nevertheless, the provisions will enable the commission to act quickly to secure maintenance where such evidence comes to light. It will act as a deterrent to non-resident parents who would otherwise be prepared to enter into transactions to prevent enforcement of their parental responsibilities. I recognise the sentiment behind Amendment No. 174, but, as I said, it is the same as what I have just outlined. As drafted, the power to freeze assets as described would be a step too far. Not only would there be practical and operational difficulties for the commission, the commission would be given administrative powers comparable to those operated by the High Court but without appeal rights. The noble Lord’s amendment would give the commission the power to make an administrative order which would freeze all assets and it would apply equally to those assets owned wholly or jointly by a non-resident parent and could be applied as soon as a payment for child maintenance had been missed. The freezing order would remain in force until the outstanding arrears had been settled. That provision does not contain any safeguards in relation to the exercise of this power, nor is there a right of appeal, as I said. In considering whether the proposal is proportionate, we need to bear in mind that the commission will have several additional enforcement options that are not currently available to the Child Support Agency. They include, as we have discussed, lump sum deduction orders, which will allow the commission to freeze and then seize assets from a number of different types of accounts. I believe that the collection and enforcement provisions will go a long way towards meeting the aims behind the noble Lord’s amendment. I invite him to withdraw his amendment and to support the government amendments.
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Lord AddingtonThe words “sledgehammer” and “nut” come to mind. I think that our concern was justified and that we were right to raise…
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Lord AddingtonLiberal Democrat
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The words “sledgehammer” and “nut” come to mind. I think that our concern was justified and that we were right to raise it, and I thank the Government for including something which seems to have a slightly weightier blow behind it. Having said that, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 22, as amended, agreed to.
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Lord McKenzie of Lutonmoved Amendment No. 175:
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Lord McKenzie of LutonLabour
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moved Amendment No. 175:
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Lord McKenzie of Lutonmoved Amendments Nos. 176 and 177:
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Lord McKenzie of LutonLabour
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moved Amendments Nos. 176 and 177:
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Lord Goodladmoved Amendment No. 178:
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Lord GoodladConservative
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moved Amendment No. 178:
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Lord SkelmersdaleI am grateful to my noble friend Lord Goodlad for tabling this amendment, to which I and my noble friend Lady Verma wer…
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Lord SkelmersdaleConservative
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I am grateful to my noble friend Lord Goodlad for tabling this amendment, to which I and my noble friend Lady Verma were only too happy to add our names. Although the withdrawal of a passport can be an effective measure to force non-resident parents to stop neglecting their obligations, it should not be within the competence of the commission to decide on that matter as the Bill proposes. It had not occurred to me that this administrative arrangement might extend to what my noble friend referred to as a “sub-contractor”, and I wonder if he is correct in that. I am sure the Minister will be able to tell us. The commission is to be set up to enforce parents’ financial obligations to maintain their children. Therefore the administrative liability orders being introduced by the Bill are, on the whole, fully understandable. However, withdrawal of a travel order authorisation goes beyond affecting a person’s financial status and interferes with one of his civil rights: the freedom to travel abroad. That remains the main argument for leaving the decision about a passport withdrawal, along with a driving licence ban and a curfew, to the courts. The reason to do so is that all administrative decisions should have strict, limited and accurate legal bases, while any interference in civil freedoms—of which the liberty to travel is one—should be undertaken under the rules of law which are more complex than a simple administrative scheme would allow. For example, orders are to be made with regard to the rule of proportionality when the court examines whether the damage caused by the civil rights limitation is proportionate to the offence committed. Not only does that mean much more advanced data to be accumulated, but also judiciary skills which are not normally to be found in the possession of civil servants. I am grateful for the receipt of a copy of the Minister’s letter to the Clerk of your Lordships’ Select Committee on the Constitution. It was extremely helpful, although I sent an email to my noble and learned friend Lord Lyell, who the Minister knows is very interested in this matter, to say, “Methinks the Minister protesteth too much”, and this is why. I am surprised, to start with, that in paragraph four the Minister stated that the commission is well placed to make both that judgment and that of the appropriateness of passport surrender. Why? Since the Child Support Agency performed badly and on many occasions was unable to collect information about the absent parent’s financial status, there is a serious threat that the new body will have neither the adequate capacity to collect the details of the person’s life nor the competence to assess in what ways a passport ban would affect his or her life. Elsewhere, the letter comments that CMEC staff will have additional training before handling cases. Gosh, will they not need it? They need it just to prepare a case for the courts, but in a case that will almost inevitably be appealed from the word go, they will need it even more. I would assume—again, the Minister will correct me if I am wrong—that that training would be of a lesser sort, as the Bill envisages administrative action. A point that has concerned all the committees that have examined the matter has been the assumption that a passport authorisation withdrawal has fewer consequences than a driving license withdrawal and can therefore remain an administrative decision, as the letter states in paragraph nine. That is simply an unjustified generalisation. It must be thoroughly recognized in what way a travel ban is going to affect the passport surrenderer’s everyday life, in exactly the same way as the court does before ordering driving licence withdrawal. That is the main reason why the decision on a passport ban, as well as the driving licence, should belong to the courts. Moreover, the argument presented to defend the position that the passport and driving licence bans have different results is what I believe is called argumento dicto simpliciter, a misleading deduction when the examples given—such as that the passport ban is allegedly not affecting third parties—are used to lead to one general conclusion, when in fact they are too trivial so to do. Opposite examples proving that third parties can be affected by the travel ban exist and can be given, such as going abroad not only for holidays but for serious medical treatment, or sustaining other family links because one of the non-resident parents may well have family abroad—but will not be countenanced. Paragraph seven of the report of the Select Committee on the Constitution states that the free movement of persons is strongly protected by international law, including the European Human Rights Convention—which of course, thanks to this Government, has been patriated by means of the Human Rights Act. Therefore, the examples of the two non-European countries given in the letter, which operate in a totally different legal system, cannot be applicable. Paragraph 11 of the letter explains that the main reason for introducing an administrative passport ban is to “take quicker and firmer” action against the non-resident parents for not fulfilling their obligations, whereas paragraph four, to which I have already referred, states that the withdrawal decision will not take effect until the person to be affected has time to appeal. Obviously, in those circumstances, it will defeat its very objective. Does the Minister really believe that anyone placed in the position of an administrative order for the withdrawal of a passport will not appeal? I cannot. Paragraph 12 does not do the Minister's defence of this disgraceful proposal any good at all. Of course, tackling child poverty is one of the Government's priorities. Although that is clearly right—we have referred to it several times during the course of our debates—there is no link between the smoother flow of maintenance and introducing a passport ban, whether or not achieved administratively. Also, it is claimed in the paragraph that non-payers should understand how serious the consequences of evading their responsibilities may be, but it does not show why exactly an administrative passport ban should result in such greater awareness. The passport ban ordered by the court would just have the same effect. I am not objecting to the introduction of a passport withdrawal per se, but to the inappropriate way of achieving it. To sum up, administrative travel authorisation withdrawal would be an exceptional way of interfering in civil rights, but I am afraid that the Government's explanations are not yet convincing enough to allow them to put this administrative modus operandi in the Bill. Unfortunately, we are in Grand Committee and neither my noble friend nor I can do anything about it at this stage. However, I observe the threat with which my noble friend concluded his speech, and am in total agreement with him.
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Baroness Hollis of HeighamThere was no reference, in either of the interesting and valid points made, to proposed Section 39B(4) of the Child Sup…
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Baroness Hollis of HeighamLabour
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There was no reference, in either of the interesting and valid points made, to proposed Section 39B(4) of the Child Support Act in the amendment: “Before making an order under this section against a person, the Commission shall consider whether the person needs a travel authorisation in order to earn a living”. The instances quoted by the noble Lords, Lord Goodlad and Lord Skelmersdale, might include, for example, a visit to family overseas on medical grounds or a need for urgent medical treatment and so on. Would the noble Lords be satisfied if my noble friend felt that a possible compromise might be to extend the grounds in new subsection (4) to, for example, take medical grounds into account, rather than to seek to make all such applications go through the courts?
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Lord McKenzie of LutonI am grateful to the noble Lord, Lord Goodlad, for tabling the amendment; it was anticipated. It would prevent the comm…
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Lord McKenzie of LutonLabour
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I am grateful to the noble Lord, Lord Goodlad, for tabling the amendment; it was anticipated. It would prevent the commission from administratively disqualifying the non-resident parent from holding or obtaining a travel authorisation, and would require the commission to apply to the court for such an order. While I acknowledge the concerns of Members of the Committee on this particular provision, I hope that I can convince them that the proposal in the Bill is the right way forward. First, however, I stress that the Government believe that we owe it to children who are not being financially supported to take swift and effective measures which may not always be appropriate to other forms of debt. I am sure that the whole Committee will agree that, when dealing with the hard core of non-compliant non-resident parents, the commission should be allowed to take robust action. We are firmly of the view that the threat of imminent action will be much more potent than the threat of a drawn-out court process. We believe this holds good, despite the fact that the order would not take effect until the time for appealing had expired. In putting forward this legislation, the Government have investigated what enforcement measures international child support jurisdictions employ. As has been referred to, both the US and Australia make use of a form of administrative passport surrender or travel ban in order to encourage compliance with child maintenance payments. This was highlighted by the Work and Pensions Select Committee in their January 2005 report on the performance of the CSA, which recommended that the department further examine passport removal as a potential child support tool for use in this country. Indeed, that committee had a distinguished chair—whose name escapes me just for the moment. Based on the experience of those other countries, we are of the view that the administrative disqualification of non-resident parents from holding or obtaining a travel authorisation will deliver fast and effective enforcement against those who have the financial means to pay child maintenance but refuse to do so. We have balanced the risks of doing this administratively with safeguards for the non-resident parent. In addition to the appeal provisions, a number of safeguards exist and have been included in the Bill. They will ensure that this measure is targeted against those who will not, as opposed to cannot, meet their financial obligations to their children. I also emphasise that, where an appeal has been filed, the order would be stayed—as has been acknowledged—pending the hearing, determination or withdrawal of that appeal. Thus, the person affected would have the opportunity to access an independent and impartial tribunal before any civil right was directly affected by the surrender of the passport. The noble Lord, Lord Skelmersdale, asked me whether I believe that someone would appeal in every instance. I do not think that is necessarily the case; if someone acknowledges that they have the cash and the commission is intent on pursuing collection, that may just be the point at which they do what they should have done previously and cough up.
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Lord SkelmersdaleThat might very well be so. We are not talking about this being the only sanction available to CMEC and therefore to th…
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Lord SkelmersdaleConservative
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That might very well be so. We are not talking about this being the only sanction available to CMEC and therefore to the advantage of the parent with care. This is one of a range, two components of which automatically have to go through the courts first. I hope the Minister will come on to that point shortly.
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Lord McKenzie of LutonIndeed, I will come on to that. It will also be emphasised that when an appeal has been filed the order will be stayed,…
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Lord McKenzie of LutonLabour
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Indeed, I will come on to that. It will also be emphasised that when an appeal has been filed the order will be stayed, so the person affected will have the opportunity to access an independent and impartial tribunal. Additional safeguards include the requirement for the commission to assess the impact on the non-resident parent’s ability to earn a living prior to imposing the order. The question of health issues was raised, such as when a family member needs to get medical support and treatment outside the country. There is no reason why that could not be taken into account in the determination of the application of this measure. It is not a requirement that the commission does this; it is a discretionary power. It does not need to be written into new Clause 39B(4) of the Child Support Act, but there is no reason why we could not think about emphasising the point. It runs right through the Bill that there is always an overriding requirement to consider the welfare of all children involved. I stress that the commission must also assess whether the non-resident parent has wilfully refused or culpably neglected to support his or her children. That is the same test as is currently applied by the court when the CSA makes an application for the non-resident parent to be committed to prison or disqualified from driving. We are dealing with situations where the non-resident parent cannot pay. If the individual is so intent on going on holiday or travelling abroad and doing what they want to do, the remedy is in their own hands: they must pay what they should. It rests with them. It is not as though this is a restriction on anyone for life. It is very much in the hands of the non-resident parent, who should fall within the ambit of this provision only where it is clear that they can pay. All they need to do is pay and this is abrogated straight away. Furthermore, the commission must consider the welfare of any child likely to be affected by the decision, which includes the children of the non-resident parent and members of his or her new family. In order that the commission meets its objective, we need to have a range of provisions that the commission can apply, and it will make clear to non-resident parents early on in the enforcement process that stronger provisions exist and may be used. This measure will be used only after other, lesser measures to recover the outstanding maintenance have been tried but maintenance remains outstanding. Those who seek to deliberately evade their responsibilities to their children must understand the seriousness of their failure to provide their children with financial support. I realise that the Select Committee on the Constitution raised a number of concerns, and the Government have already issued their formal response. The noble Lord, Lord Skelmersdale, referred to it. In summary, we believe that administrative passport surrender will be an effective form of enforcement and deterrent for the reasons I have set out. I appreciate that the committee has posed legitimate questions about the relative importance of the individual in terms of holding a passport and the fact that such decisions are normally made by judicial determination, but I reiterate that we do not underestimate the important role a passport can play in an individual’s ability to earn a living, and the Bill makes it clear that the commission must consider that before imposing the order. We also argue that the commission is best placed, through its prior dealings with the individual, to make the decision on whether the non-resident parent has shown wilful refusal or culpable neglect to pay maintenance. I shall expand on that. It is the commission in its dealings or lack of them with the non-resident parent that knows the history of the case, the basis of the assessment, the number of occasions when deduction from earnings orders have been defeated by someone changing their job, and the whole process by which a non-resident parent may have sought to avoid other enforcement mechanisms by prolonging his or her appeal. Under the wider range of enforcement powers, that information will be available to the commission, which will be able to make a judgment on whether the individual is intent on seeking to pay what is due or simply seeking to avoid it. It knows well, from a long track record of dealing with people who are intent on avoiding their obligations, when people are seeking to do that rather than when they cannot fulfil them. I distinguish that because there are issues around the withdrawal of travel rights from, for example, people involved in soccer hooliganism. The court does that because the court would have been involved in the process of dealing with those people for what they have been up to prior to that. We are dealing here with a situation where the commission has been trying to deal with this individual; it knows their track record and what they have done or not done, so it is best placed to make these judgments—which, at the end of the day, are subject to a right of appeal and a process before the court. There is a balance in all of this, and that balance should rest with the right of children to be maintained by non-resident parents or parents with care. I hope noble Lords will be assured of the merits of this proposed action and feel able to withdraw the amendment.
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Lord GoodladI thank the Minister for the thoroughness with which he has addressed this issue both in his communications with the Co…
Speaker
Lord GoodladConservative
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I thank the Minister for the thoroughness with which he has addressed this issue both in his communications with the Committee and today. I think I can speak for other Members of the Committee in saying that, although it is outwith the terms of the amendment, we yield to no one in our desire to serve the interests of children. I hope he will accept that beyond peradventure. We will scrutinise with great care what the Minister has said and whether or not it serves the interests of children in terms of the policy of the Bill to have an administrative decision followed by a right of appeal with suspensory effect, which meets the policy goal of avoiding an inevitably drawn-out court process, rather than a straightforward power for CMEC to seek an order from a magistrates’ court. That is an extremely important point and we will look at it carefully. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 179 and 180 not moved.] Clause 25 agreed to. Clauses 26 and 27 agreed to. Clause 28 [Disqualification for driving]: [Amendment No. 181 not moved.] Clause 28 agreed to. Clause 29 [Power to treat liability as satisfied]:
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Lord Kirkwood of Kirkhopemoved Amendment No. 182:
Speaker
Lord Kirkwood of KirkhopeLiberal Democrat
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moved Amendment No. 182:
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Lord SkelmersdaleThese amendments consider in the broadest terms the power of the commission to write off arrears payments and the impac…
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Lord SkelmersdaleConservative
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These amendments consider in the broadest terms the power of the commission to write off arrears payments and the impact that that power might have on the parent with care. My Amendment No. 186 was tabled to ensure that before making a decision under the proposed new Section 41E(1) of the Child Support Act to, “extinguish liability in respect of arrears of child support maintenance … the Commission shall consider the welfare of the child or children in respect of whom the arrears are due”. This is a probing amendment, intended to explore the scope of the commission’s power to write off arrears and to seek confirmation that the welfare of the child or children will be taken into consideration in respect of any regulations made by the Secretary of State when exercising his power under the proposed Clause 41E(2) of the Act. In truth, I am nervous that—
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Lord McKenzie of LutonWould the noble Lord just remind us to which amendment he is speaking?
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Lord McKenzie of LutonLabour
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Would the noble Lord just remind us to which amendment he is speaking?
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Lord SkelmersdaleAmendment No. 186.
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Lord SkelmersdaleConservative
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Amendment No. 186.
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Lord McKenzie of LutonWe are on the previous group.
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Lord McKenzie of LutonLabour
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We are on the previous group.
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Lord SkelmersdaleSorry, I have got myself into a tangle. The noble Lord, Lord Kirkwood, has just moved Amendment No. 182, has he not?
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Lord SkelmersdaleConservative
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Sorry, I have got myself into a tangle. The noble Lord, Lord Kirkwood, has just moved Amendment No. 182, has he not?
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Lord Kirkwood of KirkhopeThe selection was readjusted.
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Lord Kirkwood of KirkhopeLiberal Democrat
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The selection was readjusted.
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Lord McKenzie of LutonIf I can help, the group we are dealing with contains Amendments Nos. 182, 183 and 212. Amendment No. 186 is in the nex…
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Lord McKenzie of LutonLabour
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If I can help, the group we are dealing with contains Amendments Nos. 182, 183 and 212. Amendment No. 186 is in the next group.
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Lord Kirkwood of KirkhopeI think it was changed overnight.
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Lord Kirkwood of KirkhopeLiberal Democrat
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I think it was changed overnight.
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Baroness Hollis of HeighamIf I can help the noble Lord, between the last time we were in Committee and today the amendments have been degrouped f…
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Baroness Hollis of HeighamLabour
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If I can help the noble Lord, between the last time we were in Committee and today the amendments have been degrouped from their original grouping, which might account for the slight degree of difficulty.
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Lord SkelmersdaleAh. In that case, least said, soonest mended.
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Lord SkelmersdaleConservative
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Ah. In that case, least said, soonest mended.
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Lord McKenzie of LutonI thank the noble Lord, Lord Kirkwood, for these amendments, which relate to appeal rights in respect of the offsetting…
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Lord McKenzie of LutonLabour
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I thank the noble Lord, Lord Kirkwood, for these amendments, which relate to appeal rights in respect of the offsetting provisions in Clause 29. I hope it will be helpful if I first set out briefly how we are intending to operate this provision, which is specifically designed to allow the commission to respond to the concerns and individual circumstances of parents. The clause has two parts. In the first part we are seeking a power to enable the commission to offset maintenance liabilities between parents of the same children. We envisage that this will occur mainly where a child is living with one parent but later goes on to live with the other. We generally refer to these as “role reversal” cases. If maintenance arrears are due to the first parent with care, the provision will allow the commission to offset them against his or her maintenance liability on becoming the non-resident parent. That will prevent situations that currently occur, where parents complain that they are being chased for maintenance even though the other parent owes them maintenance. In the second part of the provision, we are providing a power to enable the commission to offset payments made from time to time by the non-resident parent to third parties, against their maintenance liability. That is intended to cover situations where a non-resident parent makes a payment that will be beneficial to the child—for example, an urgent electricity bill—on behalf of the parent with care, perhaps before he is due to pay his maintenance. Without such a provision, where such a payment is made the non-resident parent is still legally required to pay the full amount of maintenance, which means meeting his liability twice. We want to allow the commission to be able to adopt a sensible approach that reflects arrangements agreed between the parents and to offset the payment against the maintenance liability where it is appropriate to do so. For both parts of the provision, regulations will set out parameters within which the commission can use the power. In respect of payments made to third parties, that will include the types of payment that will be appropriate for offsetting, such as the one-off payment of a utility bill. Most importantly, it will be made clear that the parent with care must have agreed to the payment being made in the first place. It will then be up to the commission to decide whether to offset the payment against the non-resident parent’s maintenance liability. In all offsetting scenarios, the welfare of any children affected by the decision should always be considered. These amendments seek to afford appeal rights when the commission decides to apply offsetting in these scenarios, and Amendment No. 182 seeks appeal rights in respect of both parts of the provision and only for the parent with care if they believe that the decision is not in the best interests of the qualifying child. Amendments Nos. 183 and 212 seek to provide appeal rights specifically in respect of the offsetting of payments made to third parties, and that no action is taken until sufficient time has elapsed for an appeal to be brought. I must make it clear that before making any offsetting decision, the commission will discuss the implications with both parents and it will consider any representations made, including whether the welfare of their children may be put at risk. We do not believe that it would be appropriate to allow appeal rights in these limited situations which relate to the collection of child maintenance. In making a decision, the commission will be required to balance the needs of both parents and all children affected, and that will include children being cared for by both the parent with care and the non-resident parent. As with other matters relating to the collection of maintenance payments, if either the parent with care or the non-resident parent is still not happy with the way the commission decides to apply these provisions, they may apply for judicial review of the decision. I know that that is something of a long stop, but I hope that the noble Lord will feel reassured that there is enough protection and engagement along the way to avoid the necessity of strictly technical appeal rights and that there is the opportunity for both parents and, more importantly the children involved, to be fully protected.
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Lord Kirkwood of KirkhopeI am grateful to the Minister, and his response affords some reassurance. I do not think that a huge number of cases wi…
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Lord Kirkwood of KirkhopeLiberal Democrat
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I am grateful to the Minister, and his response affords some reassurance. I do not think that a huge number of cases will reach this kind of territory, but there is a weakness in the system. If CMEC has an overriding duty to consult and try to reach agreement, that is fine, but, in the event of a disagreement, resorting to judicial review is slightly ludicrous. Taking a sledgehammer to a nut comes to mind, as my noble friend said earlier. For the avoidance of doubt in a small number of cases, I still believe that an ability to go to a tribunal would be the better course. This is an unfettered use of discretion unless there is an appeal, so I still have some concerns about it. However, I will look carefully at what the Minister has said. I understand that we are all on the same side in trying to find the most expeditious resolution with regard to fairness to both parents, but I shall want to reflect carefully on his response. In the mean time, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 183 not moved.] Clause 29 agreed to. Clause 30 [Power to accept part payment of arrears in full and final satisfaction]:
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Lord Kirkwood of Kirkhopemoved Amendment No. 184:
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Lord Kirkwood of KirkhopeLiberal Democrat
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moved Amendment No. 184:
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Lord SkelmersdaleA few minutes ago, I was quite rightly prevented from speaking to my Amendment No. 186, which I hope that I can now do.…
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Lord SkelmersdaleConservative
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A few minutes ago, I was quite rightly prevented from speaking to my Amendment No. 186, which I hope that I can now do. It was tabled to ensure that, before taking a decision under new Section 41E(1) in Clause 31 to extinguish liability in respect of arrears of child support maintenance, the commission will take into consideration the welfare of the child or children in respect of whom the arrears of child support maintenance are due to. I can envisage occasions where it would be quite appropriate to write off the arrears, but reckon that they would be well after the child—who is of course no longer a child—had left university. It should be quite a long time. They may, of course, not be going to university. None the less that gives an age range of 23 to 25 when it might be appropriate in most cases to write off the arrears. This is clearly a probing amendment intended to explore the scope of the commission's power in this respect. I am rather nervous about Clause 31 in that it appears to go too far too quickly. It would be helpful if the Minister explained a little further how it would work. It is a considerable power that could have a considerable impact on a child. Can the Minister therefore tell me now, and not during consideration of secondary legislation, what might be the circumstances to nullify parental liability and when it would be unfair or otherwise inappropriate to enforce liability in respect of arrears? To my mind, the Bill gives the commission the power to be both judge and jury in its own case. We need some hard and fast ground rules, decided by Parliament and written into the legislation, rather than decisions left to the discretion of CMEC on this occasion. The noble Lord, Lord Kirkwood, mentioned Clause 32. It would be useful to know how the power that has already been attracted by the CSA to outsource debt collection has been utilised until now, and what the success rate has been. One knows the money figures of course, because they are published quite regularly, but one does not know the case figures involved. There are occasions when debt collectors leave a lot to be desired in their operations. I have a friend who is a solicitor in Leytonstone, who from time to time tells me horrible stories about fierce dogs going with the debt collector and that sort of thing. I most certainly would not condone that, and nor, I am sure, would the Minister.
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Baroness Hollis of HeighamDoes the Minister agree that perhaps a third of the debt is uncollectible, as with local authorities and arrears of cou…
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Baroness Hollis of HeighamLabour
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Does the Minister agree that perhaps a third of the debt is uncollectible, as with local authorities and arrears of council tax or rates liability? The obvious example is where the person is dead, although that may already be covered by regulations. They may have moved abroad, and you have spent five or seven years trying to trace them without success; you have exhausted reasonable avenues of pursuit. Yet, as I understand it, Sir John Bourn and the NAO, perfectly properly under the rules, would not allow that debt to be written off. It is like an incubus on the organisation. If I am wrong, I will be glad that the noble Lord tabled his probing amendment, but I take it that this puts uncollectible debt on to the same basis on which local authorities work. They have to use their best endeavours and act reasonably, but there comes a point at which it is not reasonable: it clutters up the books and the bodies held responsible for debt that is not collectable, and appears to cloud and muddy the financial figures. If that is the situation, as I would expect, I hope that my noble friend can give us those reassurances. If it is not, then the noble Lord, Lord Skelmersdale, has a point of real substance here.
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Lord McKenzie of LutonThis group of amendments enables us to discuss debt management powers. I hope that Members of the Committee will forgiv…
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Lord McKenzie of LutonLabour
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This group of amendments enables us to discuss debt management powers. I hope that Members of the Committee will forgive a somewhat lengthy explanation, but also that they feel that it is helpful. Amendment No. 184 concerns Clause 30, which provides a power to accept part-payment of arrears in full and final satisfaction. The provisions in Clause 30 will enable the commission to negotiate and accept settlements between parents where arrears of maintenance are due and a non-resident parent makes a reasonable offer to pay less than the total amount owed in full and final settlement of the whole debt. Amendment No. 184 would place on the commission a requirement to obtain the written consent of the parent with care before it accepts the part-payment of arrears in full and final settlement of the whole amount. This was raised in Committee in the other place, and a related issue has also been raised by the Delegated Powers and Regulatory Reform Committee concerning parent with care consent with regard to the sale of debt. In response to those concerns, it is my intention to table a government amendment on Report that will put into the Bill that PWC consent will need to be obtained under Clause 30, and under Clause 32, which provides for the power to transfer arrears. I trust that this step will help to allay any concerns which Members of the Committee may have on this issue. Amendments Nos. 185 and 186 relate to Clause 31, which provides the power to write off arrears. Amendment No. 185 would place on the commission a requirement to request and receive written consent from the parent with care before it extinguishes liability in respect of arrears. The CSA has a substantial amount of current debt: £3.7 billion. In his report, Sir David Henshaw recommended that we should seek powers to write off debt that may appear to be unrecoverable, but we decided against seeking such a broad power. There are, however, circumstances where it is appropriate to write off debt and where it would be unfair or otherwise inappropriate to try to enforce payment. It is therefore our intention to prescribe in regulations the precise circumstances where write-off can occur. The prescribed circumstances will be limited to cases where there is no continuing maintenance liability and the parent with care has expressly asked the commission not to take action to recover the arrears, where the parent with care has died, or where the non-resident parent has died and the debt cannot be recovered from the estate. I think Members of the Committee will agree that, in the circumstances I have just outlined, the commission will either be acting in accordance with the express wish of the parent with care, or will have no option other than to write off the arrears. As I have said, we will write off debt only where it would be “unfair or otherwise inappropriate” to enforce the arrears. The “unfair or inappropriate” test will usually be satisfied where the prescribed circumstances apply, but will also provide extra protection to ensure that the debt is written off only where the commission has properly considered all the circumstances of the case. For example, it might decide not to extinguish the debt if it suspects that the person with care has come under pressure from the non-resident parent. I assure Members of the Committee that the Government have absolutely no intention of writing off debt that is due to be paid to a parent with care against their wishes. However, there is already a sufficient safeguard in the Bill to provide that, where a parent with care wishes a debt to be recovered, it is not written off, and that the detail of the process of writing off debt should be set out in regulations. Amendment No. 186 would place on the commission a specific requirement to consider the welfare of the children in respect of whom the arrears are due when it decides to extinguish child maintenance arrears. I agree that the commission must consider the welfare of children, but it is unnecessary for this to be provided for in Clause 31, as we have discussed on a number of occasions today. Section 2 of the Child Support Act already goes wider than the proposed amendment. It requires the Secretary of State, when exercising any discretionary powers given to him by that Act, to have regard to the welfare of any child likely to be affected by his decision. That duty applies equally to all children in the households of both the parent with care and the non-resident parent. It will apply equally to the commission when it takes over the Secretary of State’s functions. This means that when a decision to extinguish maintenance arrears is taken, the existing child support legislation already safeguards the welfare of children affected by that decision, and we do not believe that there is a need to repeat what is already a statutory obligation to provide. Amendment No. 188 would provide for regulations to enable a parent with care to request the appointment of a named inspector to expedite recovery procedures when maintenance arrears have fallen behind by more than two months. As noble Lords will be aware, our intention is that the new commission should be an NDPB that has the flexibility to shape its services and adapt its policies in the light of developing experience. The new clause proposed in Amendment No. 188 would curtail that flexibility from the outset by obliging the commission to organise its work in a particular way. Not only would that place a restrictive burden on the new organisation before it starts, but it has practical implications in that it is more likely to slow down the recovery process than enhance it. We intend that the commission should be able to develop its own operating model and have the flexibility to harness the skills of private and voluntary sector partners in delivering its services. Should the commission find that it wishes to contract out part of its recovery service, the requirement in the Bill for an employer-named individual would be an unnecessary obstacle. In summary, the new clause would prove a burden to the organisation and in practice would not improve the customer’s experience or the recovery process. The final amendment in this group is Amendment No. 200, which concerns Clause 40. This clause relates to the: “Extinction of liability in respect of interest and fees”. The amendment would require the commission, when writing off liability due to unpaid fees or interest, to give the parent with care written notice and a right of appeal to a tribunal on the grounds that extinguishing the debt would not be in the best interests of the child for whom the liability is due. I should explain the background to this clause. Regulations made in 1992 under the 1991 Act provide for the charging of interest on maintenance arrears and the charging of fees in respect of the assessment and collection of child support maintenance. The agency stopped charging fees and interest in the mid-1990s, and these regulations were repealed in 2001. On the debt that had built up as a result of parents not paying remains, the total amount of debt from unpaid interest is around £1.9 million, but we expect that in individual cases, the amounts will be very small. In the case of debt as a result of fees charged, the amount is around £12 million, which would accrue to the Secretary of State. The purpose of the power in Clause 40 is to ensure that interest or fees that accrued under the 1992 regulations will be extinguished. In effect, it is a one-off tidying-up provision. It is our intention to notify parents when debt from unpaid interest is written off, as we believe it would be unfair to raise the unrealistic expectations of parents with care that such debt could now ever be recovered. Creating a right of appeal against this decision would only introduce yet another stage and make the whole process protracted and drawn-out without any reasonable prospect of ever recovering this debt, which could be over 10 years old. It would therefore be inappropriate to give a right of appeal to a parent with care in the context of what are in essence good housekeeping provisions that will enable the commission to manage debt more effectively. I shall pick up on some of the other points that were made. The noble Lord, Lord Kirkwood, commented on Clause 32 and the transfer of debt. A bit of market testing was done around this issue to see if the market had an appetite for taking on a tranche of the agency’s current debt and whether it was likely to provide value for money. Bearing in mind that if it were possible to get some cash to parents while the children are still young, that might be something to be welcomed. However, perhaps not surprisingly, the result of the work showed that while there may be some market interest, it was more keen on what might be called the low-hanging fruit, which would need to be parcelled up with liability orders and thus would be relatively easy to collect. With the wider range of powers that the commission will have, it should be much better placed to enforce such orders.
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Lord SkelmersdaleI am not sure that “comforted” is yet the right word. I will have to consider this really quite carefully. My initial t…
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Lord SkelmersdaleConservative
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I am not sure that “comforted” is yet the right word. I will have to consider this really quite carefully. My initial thoughts are that, although it is totally appropriate to seek to get the consent of the parent with care before writing off the debt that was due usually to her, this should not be an out-and-out veto, because otherwise the commission would continue to be landed with uncollectible debt because of a veto of the parent with care. I therefore reserve my position. The same applies to the transfer of arrears. The Minister’s definition of the expression clearly means something rather different from mine when I came into the Grand Committee this afternoon. I shall look at this very carefully, because as I said I have some slight initial reservations about the consultation with the parent with care.
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Lord McKenzie of LutonFor clarity, let me help the noble Lord. On the transfer of arrears, we are looking at the potential to sell a tranche…
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Lord McKenzie of LutonLabour
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For clarity, let me help the noble Lord. On the transfer of arrears, we are looking at the potential to sell a tranche of debt. The agency or the commission would get the money for that and there would be a basis on which to distribute it to parents with care, although we do not believe that that is likely to be a significant runner, if a runner at all. If it was, however, the specific consent of the parent with care would and should be required for the debt that was transferred. On write-offs under Clause 31, the noble Lord is right that there are some circumstances in which the parent with care should not have a veto—for example if the non-resident parent or the estate cannot pay or does not have the wherewithal to do that. I also stress that there will be circumstances in which the parent with care may have given consent, but if the commission feels that the parent with care has been unduly got at and pressured to give that consent, it would have to comply with that agreement and would not necessarily have to write off that debt. I hope that the noble Lord will feel more satisfied once he has had a chance to read the record.
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Lord SkelmersdaleIt is not my amendment to withdraw; I was just speaking to it.
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Lord SkelmersdaleConservative
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It is not my amendment to withdraw; I was just speaking to it.
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Lord Kirkwood of KirkhopeI am now about to make a 35-minute speech in reply. I am sure we are all grateful to the Minister. He has given us a lo…
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Lord Kirkwood of KirkhopeLiberal Democrat
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I am now about to make a 35-minute speech in reply. I am sure we are all grateful to the Minister. He has given us a lot to think about, and we have all of next week to do nothing but read the Official Report, which I promise faithfully to do. I am sure we will all be returning, collectively or individually, to some of these issues, but with regard to what he has said regarding this group of these amendments, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 30 agreed to. Clause 31 [Power to write off arrears]: [Amendments Nos. 185 and 186 not moved.] Clause 31 agreed to. Clause 32 agreed to. [Amendments Nos. 187 to 191 not moved.]
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Lord McKenzie of LutonThis may be a convenient moment for the Committee to adjourn until Wednesday 20 February at 3.45 pm.
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Lord McKenzie of LutonLabour
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This may be a convenient moment for the Committee to adjourn until Wednesday 20 February at 3.45 pm.
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Lord SkelmersdaleThree forty-five, not 3.30?
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Lord SkelmersdaleConservative
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Three forty-five, not 3.30?
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The Deputy Chairman of Committees (Viscount Simon)The Committee stands adjourned until Wednesday 20 February at 3.45 pm. The Committee adjourned at 5.50 pm.
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The Deputy Chairman of Committees (Viscount Simon)Labour
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The Committee stands adjourned until Wednesday 20 February at 3.45 pm. The Committee adjourned at 5.50 pm.
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EnactedChild Maintenance and Other Payments Act 2008